'Challenging PC market' drags on Intel's Q2

Revenues fall five per cent to $13.2bn despite boost from IoT and datacentre

Hit by the "challenging PC market", Intel has recorded a drop in sales for its Q2 2015, despite enjoying a bump in growth from its datacentre, Internet of Things (IoT) and memory businesses.

For its second quarter of 2015, the chip-making behemoth's net income was down three per cent year over year at $2.7bn (£1.73bn) on revenues of $13.2bn, which were down five per cent over the same period.

Brian Krzanich, Intel chief executive, remained sanguine despite the drop in sales and profits.

"Second-quarter results demonstrate the transformation of our business as growth in datacentre, memory and IoT accounted for more than 70 per cent of our operating profit and helped offset a challenging PC market," he said.

"We continue to be confident in our growth strategy and are focused on innovation and execution. We expect the launches of Skylake, Microsoft's Windows 10 and new OEM systems will bring excitement to client computing in the second half of 2015."

Intel is due to release its microprocessing Skylake chip in the second half of 2015.

Its results were boosted by its IoT business, which saw revenues of $559m, up four per cent year over year. But client computing revenues were down 14 per cent year over at $7.5bn.

Stacy Smith, Intel's CFO and executive vice president, said she expected the continuing decline of the PC market to hinder revenue growth over the whole of 2015.

"Turning to the full year 2015, we expect revenue to be down approximately one per cent from 2014, lower than our prior guidance of approximately flat. Our expectations are that the PC market is going to be weaker than previously expected," she said on an earnings call transcribed by Seeking Alpha.

"We continue to forecast robust growth rates in the Data Center Group, Internet of Things Group, and NAND businesses, which we expect to mostly offset the PC decline."