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Intel shows its financial results, loses steam in data centers

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Intel's business within fast-growing data centers has failed to meet Wall Street's goals, following strong competition from AMD with its EPYC processors, and the further delay of Intel's processors at 10nm until second half of 2019.

Intel does well, but 10nm delays take their toll

Intel's sales to data centers that power mobile and web applications rose 26.9% to $ 5.55 billion in the second quarter ended June 30. Analysts had expected revenue of $ 5.63 billion, so Intel has been unable to meet expectations. AMD has been gaining ground with its new EPYC chips, surpassing quarterly earnings and revenue estimates on Wednesday, demonstrating the company's good deeds with these new Zen-based processors.

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In an investor conference call, Acting Intel Chairman Bob Swan said the firm expected its next-generation 10nm chips to be in stores during the second half of 2019. Murthy Renduchintala, head of chip architecture at Intel, said in the call that 10-chip data center chips will be released soon after PC chips.

Last quarter, the company said its 10nm processors were being delayed from 2018 to 2019, but did not specify when they would arrive. Intel originally predicted that the chips would be ready by 2015, meaning they already have three years of lags. Very bad news, especially considering that TSMC expects 7nm chips to contribute more than 20 percent to its revenue next year.

Intel's net income increased to $ 5.01 billion, or $ 1.05 per share. Excluding items, the company earned $ 1.04 per share, beating Thomson Reuters' expectations of 96 cents per share. The company benefited from the recovery in the PC market, where global shipments grew for the first time in six years. Revenue in the customer computing business increased 6.3% to 8.73 billion, exceeding FactSet estimates of 8.4 billion. Net income increased 14.9% to 16.96 billion, above estimates of 16.77 billion.

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