Intel (NASDAQ:INTC) had a Q2 gross margin of 62.5%, +200 bps Q/Q and -200 bps Y/Y, and above a guidance midpoint of 62%. Q3 GM guidance is at 63% (+/- 2%), and full-year guidance has been hiked by 50 bps to 61.5% (+/- 2%).
The 2015 capex budget has been cut yet again, this time by $1B to $7.7B (+/- $500M). Based on revenue guidance, capex is set to equal ~14% of 2015 revenue.
PC/mobile CPUs: As expected, Client Computing Group (CCG) sales were soft, falling 14% Y/Y to $7.5B. Op. profit fell 38% to 1.6B. Volumes were flat Q/Q and down 10% Y/Y. ASPs +2% Q/Q and -3% Y/Y. Desktop volumes -22% Y/Y, notebooks -11%, tablets +11%.
Server CPUs: Data Center Group (DCG) sales rose 10% Y/Y to $3.9B, a slowdown from Q1's 19% but better than feared. Op. profit was roughly flat at $1.8B. Volumes +2% Q/Q and +5% Y/Y. ASPs +3% Q/Q and +5% Y/Y.
Other segments: IoT Group revenue +5% Y/Y to $559M; op. profit -1% to $145M. Software/services revenue -3% to $534M; op. profit fell by $5M to $14M. "Other" (flash memory, devices, one-time expenses) revenue +38% to $715M; op. loss fell by $41M to $708M.
Financials: Q2 EPS benefited from a 9.3% tax rate, the result of "a one-time refund claim and [Intel's] decision to indefinitely reinvest certain prior years' non-U.S. earnings." R&D/MG&A spend +2% Y/Y to $5B; full-year guidance has been hiked by $100M to $19.8B (+/- $400M).
Balance sheet: $697M was spent on buybacks, down from Q1's $750M and Q4's $4B. Inventories rose by $400M Q/Q to $4.8B. Intel ended Q2 with $16B in cash/investments, and $13.2B in debt.
Update (6:00PM ET): Intel is now up 2.4% AH.