Chipmaker Intel on Thursday posted a surprise quarterly profit as a PC market slump started to ease, and forecast third-quarter earnings above Wall Street expectations, sending its shares up about 6 per cent, reports Reuters.
The market for personal computers has tumbled over the past year, with inventory piling up because consumers had already bought machines needed during the pandemic.
But the glut has started to ease, with PC shipments falling only 11.5 per cent in the June quarter compared to a 30 per cent slump in each of the previous two quarters, Canalys data showed.
The PC market improvement prompted Intel to forecast better margins for the third quarter. Its margins in recent quarters were nearly half its historical highs, but Intel said on Thursday it expects profit margins to improve in the second half of the year.
"Intel did outperform almost exclusively on the strength of desktop sales which rebounded from a near-record low last quarter," said Edward Snyder, analyst at Charter Equity Research.
After over four consecutive quarters of deep declines across its biggest segment that includes personal computers, revenue dropped 12 per cent to $6.8 billion, from $7.7 billion in the year-ago period.
Intel's foundry business, which aims to make chips for other companies and is its smallest sales contributor, reported revenue of $232 million, up from $57 million a year ago.
Sales in Intel's data center and artificial intelligence business fell 15 per cent to $4 billion from $4.7 billion in the year-ago quarter.
Those results beat Wall Street estimates, but reflect that cloud majors Microsoft and Alphabet expect to ramp up spending on data centers with most of the spending benefiting Nvidia that makes chips for AI.
