Intel reported quarterly revenue not as high as expected, as strong sales of its chips that power data centers failed to offset the slump in demand for PC chips.
Sales from Intel's PC business, which also includes chips for mobile phones and tablets, declined 3 percent to $7.3 billion in the second quarter.
Intel has been focusing on its data center business as it looks to reduce its dependence on the slowing PC market.
"Second-quarter revenue matched our outlook and profitability was better than we expected," said Brian Krzanich, Intel CEO. "In addition, our restructuring initiative to accelerate Intel's transformation is solidly on-track. We're gaining momentum heading into the second half. While we remain cautious on the PC market, we’re forecasting growth in 2016 built on strength in data center, the Internet of Things and programmable solutions."
Revenue from the company's data center business rose 5 percent to $4 billion from a year earlier and accounted for 30 percent of total revenue.
Intel, however, reported a better-than-expected profit as restructuring efforts begin to pay off.
Intel's net income fell to $1.33 billion in the second quarter ended July 2, from $2.71 billion a year earlier.
Profit for the quarter was hit by a one-time charge of $1.41 billion related to its plan to cut 12,000 jobs.