Intel said last night its second-quarter profit jumped 44% from a year ago to $1.3 billion, boosted by a tax gain and strong sales.
Revenue at the world's biggest computer chip maker rose to $8.7 billion, up 8% from the April-June period in 2006.
This was ahead of analysts' consensus forecast of $8.5 billion.
However, the company's shares fell amid signs that fierce competition continues to push chip prices lower and Intel also had weak sales of its memory flash chips, which used in mobile phones.
Intel shares fell nearly 5% to $25.05 in after-hours trading. However, the stock is up 29% since the start of the year.
Intel president and chief executive Paul Otellini said : 'We're pleased that our efforts to streamline the company are delivering profit growth in excess of revenue growth.'
Intel is currently in the process of combining its flash memory business with that of STMicroelectronics in a joint venture that is also backed by US private equity firm Francisco Partners.
In May the around 2,000 Irish employees working in the area were told that their jobs will not be moving.
The company employs over 5,500 people in Ireland.
