Chipmaker Intel Corp 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 percent in after-hours trading on Thursday. Intel has been grappling with a declining PC industry it helped found and has been pushing into making chips that power data centers and also into autonomous vehicle technology. The company agreed in March to buy autonomous vehicle technology firm Mobileye NV, 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 on Thursday. The company is also benefiting from lower-than-expected declines in personal computer shipments. Worldwide shipments of traditional PCs were down 3.3 percent in the second quarter from a year earlier, slightly better than expectations of a 3.9 percent 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 percent 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 percent to 4 percent range every year," said Edward Jones analyst Dave Heger.
Revenue from the data center business, a focus for the company, rose 9 percent to $4.37 billion, but missed expectation of $4.41 billion, according to FactSet. The company's Internet of Things business grew 26 percent to $720 million. Intel said it expected full-year adjusted earnings to be $3 per share, plus or minus 5 percent, 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 $500 million.