Intel last night reported better than expected quarterly earnings and revenue, boosted by improving personal computer demand and growth in its data centre and cloud businesses.
But its revenue forecast for the current quarter disappointed Wall Street. The world's largest chipmaker's shares were down 5.3% in after-hours trading last night.
Intel said it expects fourth-quarter revenue of $15.7 billion, plus or minus $500m. Analysts on average were expecting $15.86 billion, according to Thomson Reuters I/B/E/S.
"This is below the average seasonal increase for the fourth quarter as we expect the worldwide PC supply chain to reduce their inventory," the company's executive vice president Stacy Smith said on a conference call with analysts.
Last month, Intel raised its third-quarter revenue forecast for the first time in more than two years, citing improving PC demand.
Revenue from Intel's data centre business, which offers storage and cloud-based software services, rose 9.7% to $4.54 billion in the third quarter, from a year earlier.
Revenue growth from this unit for the full year will likely be in the high single digits, Intel's chief executive Brian Krzanich said.
Demand for cloud-based services has been growing as more businesses shift to cloud-computing methods.
Intel, which has been hurt due to weak PC demand, said last month it was seeing signs of improvement among PC parts suppliers.
According to research firm IDC, global PC shipments fell by a smaller-than-expected 3.9% in the third quarter.
Revenue from the company's traditional PC business, which still accounts for over half of Intel's total revenue, rose 4.5% to $8.89 billion.
Excluding items, the company earned 80 cents per share, above analysts' average estimate of 73 cents.
The company said its net revenue rose 9.1% to $15.78 billion, beating the average analyst estimate of $15.58 billion.
Net income rose to $3.38 billion, or 69 cents per shares, in the third quarter ended October 1, from $3.11 billion, or 64 cents per share, a year earlier.