UK Edition
Intel hikes forecasts after second quarter beat
Semiconductor maker Intel hiked its forecasts for the full year, shrugging off concerns over new challengers entering the computer processing market and the departure of its chief executive.
Intel posted revenue of $17bn (£13bn) for the three months to the end of June, up 15pc from $14.8bn a year earlier, driving earnings per share 82pc higher to $1.05.
It said the rise came due to "strength across the business and customer demand for performance-leading Intel platforms" and, as it had continued to see these trends going into the third quarter, it was raising its full year revenue and earnings outlook.
It is now expecting revenue for the year to come in at $69.5bn, $2bn higher than its earlier estimates, and earnings per share at $4.10, up $0.31.
During the most recent quarter, Intel said it had seen growth across both its PC-centric and data-centric business segments.
However, the 27pc revenue rise in the higher-margin data centre business, to $5.5bn, missed analyst expectations, spooking investors given the segment has been the main driving force behind Intel's recent growth. Tech giants such as Amazon and Google's data centres use Intel's silicon.
The news sent shares in Intel 5pc lower in after-hours trade, a disappointment for a company which has, since the start of 2018, outperformed peers in terms of share price growth. Over the past year, it has seen its share price rise 50pc.
Intel could be set to receive a boost, however, after it emerged earlier this week that Apple was likely to drop Qualcomm's modems in its next iPhones, amid legal wranglings between the pair.
Apple started using more Intel modems in its smartphones in 2016, and the semiconductor maker looks well placed to benefit should Apple's relationship with Qualcomm break down further.
It would likely quell fears over Intel's future, given it may have to battle more competition in the computer processing market, in which it is currently a leader, due to technological advancements such as artificial intelligence.
It has also been dealt a blow in recent weeks, after its chief executive Brian Krzanich had to step down from his role due to a extramarital relationship with an employee. Chief financial officer Bob Swan took up the CEO post on an interim basis, while Intel searches for a permanent replacement.