Intel results give new hope to ailing PC industry

Intel's quarterly results and outlook blew past Wall Street forecasts on better-than-expected consumer demand for PCs, especially in Asia, setting an auspicious tone for the technology sector.

Shares of Intel, the world's largest chipmaker, jumped eight per cent on the report, driving S&P's 500 stock index futures sharply higher and bolstering technology shares such as arch rival AMD.

Intel projected third-quarter revenue at $8.1 billion (Dh29.75bn) to $8.9bn, compared to analysts' average forecast of $7.8bn.

CFO Stacy Smith said fourth-quarter gross margins could scale the high end of a "normal" range – which Intel defines as 50 to 60 per cent – due partly to declining production costs for new generations of chips and other factors.

Intel's strong showing came despite what it described as weak demand from the corporations that traditionally are big buyers of computer equipment, and comments by Intel executives that Microsoft's forthcoming Windows 7 operating system is unlikely to revive corporate spending this year.

"You have an $8bn quarter with very little enterprise spending taking place," said Doug Freedman, an analyst at Broadpoint Amtech.

Excluding charges for a European antitrust fine, Intel said it earned 18 cents a share in the second quarter, beating the average forecast of eight cents.

Revenue in the three months ended June 27 was $8bn, down 15 per cent year-over-year, but well above the $7.27bn expected by analysts.

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