Chip maker Intel's second quarter results easily beat Wall Street forecasts last night, starting the technology sector's earnings season with a bang.
The world's largest chip maker also signalled that its third-quarter revenue would be $8.1 billion to $8.9 billion, compared with analysts' average forecast of $7.82 billion.
Intel's microprocessors are used in more than three-quarters of the world's personal computers, so the company's results are a barometer for the global PC sector.
Intel has felt the effects of the economic recession and the slowdown in technology spending, though chief executive Paul Otellini said in April that PC sales had 'bottomed out' in the first quarter and that the industry was returning to seasonal business patterns. The company employs 5,000 people in Ireland.
The chip maker recorded a net loss of $398m, or seven cents a share, for the second quarter, after taking charges related to a $1.45 billion fine imposed by EU regulators, who ruled in May that Intel abused its market position to squeeze out AMD. Intel has said it intends to appeal the ruling. This time last year, Intel earned $1.6 billion in net profit, or 28 cents a share.
Excluding the charges, Intel said it earned 18 cents a share in the second quarter, beating by far the average analyst forecast of eight cents. Revenue in the three months ending June 27 was $8 billion, down 15% from a year earlier, but well above the average forecast of $7.27 billion expected by analysts.
Intel finance chief Stacy Smith attributed the upside to strengthening computer markets, particularly in Asia. The executive noted that the corporate market remains weak and that Intel does not expect does not expect much of a change in the second half of the year.
Intel had stopped providing investors with official financial forecasts in January, limiting its comments to internal revenue targets. Smith said the decision to resume guidance was a sign that the company's visibility has improved as order rates become more predictable.
