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Intel Corp. shares surged in the extended session Thursday after the chip maker posted a surprise profit as PC and data-center sales came in better than expected.
Intel
INTC,
shares surged as much as 7% after hours, following a 0.6% rise to close the regular session at $34.55.
The company reported second-quarter net income of $1.48 billion, or 35 cents a share, versus a loss of $454 million, or 11 cents a share, in the year-ago period.
After adjusting for restructuring charges and other items, Intel reported 13 cents a share, versus net income of 28 cents a share a year ago.
Revenue fell to $12.95 billion from $15.32 billion in the year-ago period, and adjusted gross margins came in at 39.8%.
Intel had forecast an adjusted second-quarter loss of 4 cents a share on revenue of about $11.5 billion to $12.5 billion for the current period, and adjusted gross margins of about 33.2% for the quarter.
Analysts surveyed by FactSet, on average, expected a loss of 4 cents a share on revenue of $12.12 billion.
Intel posted PC-group sales of $6.8 billion and data-center sales of $4 billion, while analysts surveyed by FactSet had forecast $6.08 billion and $3.8 billion, respectively.
Before the conference call, Edward Jones analyst Logan Purk told MarketWatch in an interview following the report that most of the improvement in Intel’s gross margin came from the unexpected amount of growth in the PC business.
“The magnitude of client computing growth, and how the PC market is recovering faster than anticipated,” came as a surprise, Purk told MarketWatch. The analyst, who has a hold on Intel, said he expects sequential single-digit improvement in data center going forward.
Meanwhile, network and edge sales came in at $1.4 billion, while analysts called for $1.48 billion, and foundry services revenue rose to $232 million for the quarter, while Wall Street looked for $149.2 million.
Intel forecast third-quarter earnings of about 20 cents a share on revenue of about $12.9 billion to $13.9 billion and adjusted gross margins of about 43% for the current quarter. Analysts surveyed by FactSet had forecast third-quarter adjusted earnings of 16 cents a share on revenue of $13.22 billion.
Year to date, Intel shares have gained nearly 31%, while the PHLX Semiconductor Index
SOX,
has surged 49%, the S&P 500
SPX,
has grown 18%, the Nasdaq Composite
COMP,
has gained 34% and the Dow Jones Industrial Average
DJIA,
is up more than 6%.
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