Intel found out Thursday that even as it grows its data-center business, Wall Street is going to want more. Oh, and it would also be good for the company to pick a new chief executive, too.
After the stock market closed, the semiconductor giant’s shares fell about 5.7 percent, to $49.20, even though Intel reported second-quarter results that topped analysts’ expectations. Intel said that for the quarter ended June 30, it earned $1.04 a share, excluding one-time items, on $16.96 billion in revenue, while analysts had forecast the company to earn 96 cents a share, on sales of $16.77 billion. During the same period a year ago, Intel earned 72 cents a share, on $14.8 billion in revenue.
Client computing, which includes sales of chips for personal computers, remained Intel’s biggest business area, with revenue rising 6 percent from a year ago, to $8.7 billion. But the company’s biggest gains came from data-center sales, which reached $5.5 billion, a 27-percent increase from last year’s second quarter.
Speaking on a conference call to discuss Intel’s results, interim Chief Executive Bob Swan said the company continued to see strong demand for its cloud and communications semiconductor products from data-center customers.
However, Wall Street analysts were looking for Intel’s data-center sales to reach $5.63 billion.
The company also didn’t say anything about naming a new CEO to replace Brian Krzanich, who stepped down in June after it became known he had a consensual relationship with an Intel employee. The relationship was in violation of Intel’s non-fraternization policies.
Swan, who is also Intel’s chief financial officer, has said he is not a candidate for the company’s full-time CEO job. Some analysts said that Intel is testing the patience of its investors by not having named a new CEO in more than a month since Krzanich resigned.
“They will need to get their management in place and start telling the right story for growth to the street,” said Ben Bajarin, of tech research firm Creative Strategies. “Basically, the stock is being hampered by there being more questions than answers by investors.”
Intel also raised its outlook for its entire fiscal year, as the company said it expects to earn $4.15 a share, excluding one-time items, on $69.5 billion in revenue. Wall Street analysts had been forecasting Intel to earn $4.01 a share, on sales of $68.43 billion.