Intel 2Q net income jumps on PC replacement

 

The Associated Press

Intel's earnings jumped 40 percent in the latest quarter, beating expectations, as companies picked up the pace of office PC replacement.

Revenue rose 8 percent, a strong showing for a company that has seen stagnant sales for the last two years.

Intel Corp. is the world's largest maker of microprocessors, which act as the "brains" of computers.

The Santa Clara, California, company said Tuesday that it earned $2.8 billion, or 55 cents per share, in the April to June quarter. That compares with $2.0 billion, or 39 cents per share, a year earlier.

Revenue was $13.83 billion, up from $12.81 billion a year ago.

Analysts, on average, were expecting earnings of 52 cents per share on revenue of $13.7 billion, according to FactSet.

Microsoft ended support for Windows XP in April. Businesses are now replacing computers that run the operating system, which was launched in 2001.

For the third quarter, Intel is forecasting revenue of $14.4 billion. Analysts were expecting $14 billion. The company is predicting a gross margin of 66 percent, 3 percentage points higher than analyst expectations, implying higher-than-expected net income.

The company is using some of the cash that's rolling in to speed up stock repurchases. It said it will buy back an additional $20 billion in stock over time, with about $4 billion of those purchases in the current quarter. That's up from $2.1 billion in the quarter that ended in June.

Intel shares climbed $1.43 cents, or 4.5 percent, to $33.14 in extended trading after the results came out. The stock had closed at $31.71, up 22 cents, after setting a new 14-year high of $31.80 earlier in the day.

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