Intel Gives Bullish Forecast With Data Center Surge Continuing

Intel reported second-quarter results that topped analysts’ estimates on most measures and raised its full-year outlook, according to Bloomberg. But the shares slipped as some analysts saw signs that growth may slow at the end of the year.

Revenue in the current period will be about $18.1 billion, plus or minus $500 million, the company said in a statement. That compares with an average analyst estimate of $17.6 billion, though it fell short of some of the most bullish projections. For the full year, Intel increased its revenue target to a record $69.5 billion. The shares fell 6.7 percent in pre-market trading Friday.

The results are Intel’s first since the departure of CEO Brian Krzanich, who was removed in June after the chipmaker learned he’d had an extramarital relationship with a subordinate. While the board named CFO Robert Swan as the interim CEO, some analysts expressed concern that Intel could be more vulnerable amid a leadership vacuum. Intel is already struggling with manufacturing difficulties and rivals that are trying to muscle in on its lucrative dominance of computer chips.

The second-quarter report showed little evidence of that as giant data-center operators, such as Google and Amazon, continued to pour money into their networks, which are built on Intel’s silicon. Revenue was helped by customers buying higher-performance products, which carry heftier price tags, Swan said in an interview.

Intel’s data-center group reported a revenue surge of 27 percent to $5.5 billion. Personal-computer processor sales climbed 6 percent from a year ago to $8.7 billion, Intel said. Swan told analysts on a conference call that Intel’s biggest current problem is keeping up with demand, something it will struggle to do in the second half of the year if the PC market continues to improve. For the second quarter, Intel said net income rose to $5 billion, or $1.05 a share, from $2.8 billion, or 58 cents, a year earlier. Sales rose 15 percent to $17 billion.