Chipmaker Intel raised its full-year revenue and profit forecasts on higher expectations for its mainstay personal computer business and growth in newer areas such as artificial intelligence and autonomous driving.
Shares of the world's largest chipmaker, which also beat second-quarter estimates, were up 1.3% in after-hours trading yesterday.
Intel has been grappling with a declining PC industry it helped found and has been pushing into making chips that power data centres and also into autonomous vehicle technology.
The company agreed in March to buy autonomous vehicle technology firm Mobileye, thrusting Intel into the forefront of the market.
Intel expects to close the Mobileye purchase in the current quarter, several months earlier than expected, Chief Executive Brian Krzanich said on a post-earnings call yesterday.
The company is also benefiting from lower-than-expected declines in personal computer shipments.
Worldwide shipments of traditional PCs were down 3.3% in the second quarter from a year earlier, slightly better than expectations of a 3.9% decline, research firm IDC said this month.
Revenue in Intel's client computing, the biggest contributor to sales and which supplies chips to PC makers, rose 12% to $8.21 billion.
Analysts had expected $7.88 billion, according to financial data and analytics firm FactSet.
"My biggest takeaway was kind of surprise with how strong the PC side of business was in a market where PC units appear to be declining in the 3% to 4% range every year," said Edward Jones analyst Dave Heger.
Revenue from the data centre business, a focus for the company, rose 9% to $4.37 billion, but missed expectation of $4.41 billion, according to FactSet.
The company's Internet of Things business grew 26% to $720m.
Intel said it expected full-year adjusted earnings to be $3 per share, plus or minus 5%, or $2.85 to $3.15.
The new forecast is 15 cents higher than the previous estimate.
Intel also increased its full-year revenue forecast by $1.3 billion to $61.3 billion, plus or minus $500m.
Analysts on average were expecting earnings of $2.86 per share and revenue of $60.22 billion, according to Thomson Reuters.
On an adjusted basis, Intel earned 72 cents per share in the second quarter, ahead of analysts' estimate of 68 cents.
Adjusted for certain items, revenue was $14.76 billion, ahead of estimates of $14.41 billion.