Despite Disappointing Q2 Results, Intel Optimistic On IoT

Feels data centers, the Internet of Things and programmable solutions will fetch considerable growth in 2016

intel_job_cutIntel reported a not so great Q2 this year. The microchip giant grew by a mere 3% compared to the last year, and posted $13.5 billion revenues. ´The Q2 Profit figures however, were quiet disappointing. Intel’s profits were down by 51% this quarter compared to the same period last year.

While such a dip in profits is never a good sign for any firm, but Intel’s brass is quiet optimistic.

Intel CEO Brian Krzanich said that current results matched the company’s outlook and is hopeful about the future. He said, “Our restructuring initiative to accelerate Intel’s transformation is solidly on track…We are gaining momentum heading into the second half.”

He is pinning his hopes on current restructuring and revised company focus.  He said, “While we remain cautious on the PC market, we are forecasting growth in 2016 built on strength in data centers, the Internet of Things and programmable solutions.”

His statement doesn’t really make much of sense because the company’s Q2 revenues in these segments were not that good. Compared to the same period last year, the data center revenues grew to only $4 billion (a 5% increase), which as per analysts’ estimation should have been $$4.16 billion; and IoT revenues grew to $572 million, which again is just a 2% increase.

 Moreover, even industry analysts’ are of the opinion that current restructuring costs and focus on Internet of Things (IoT) and cloud-based businesses resulted in poor profits for the company.

For those unaware, the micro chip spent $1.4 billion as restructuring costs, and cut 12,000 employees from its worldwide workforce hoping to produce $750 million in cash savings this year and $1.4 billion annual savings beginning in 2017. Maybe, Intel’s upcoming datacenter chips, which are due for a launch later this year, might help the company increase its profit margins.

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