Intel earnings lifted by rebounding PC market

Intel's second-quarter profit grew 40% year over year

Intel's second-quarter earnings got a boost from a quicker-than-expected turnaround in the PC market, driven by the continuing upgrades from Windows XP, the chip maker said Tuesday.

Intel recorded a net profit of $2.8 billion for the second quarter of 2014, up 40% from the same quarter last year, the company said.

Revenue was $13.8 billion, up 8% year over year. Analysts polled by Thomson Reuters had expected revenue of $14 billion.

Shipments from Intel's PC Client Group expanded 9% as it shifted more Haswell- and Bay Trail-based processors. Revenue from the division was up 6% to $8.7 billion.

The PC market is recovering more quickly than expected, with upgrades from XP to newer platforms still in full swing.

According to IDC, 74.4 million PCs were shipped worldwide in the second quarter, down 1.7% from the same quarter a year ago. That's the slowest quarterly decline in two years, and much better than the 7.1% decline IDC had previously forecast.

The first PCs based on Intel's 14-nanometer Broadwell chip, the successor to Haswell, will be available by the end of the year, CEO Brian Krzanich said in a statement. Intel announced its first Broadwell chips, branded Core M, at last month's Computex trade show, where it also showed a high-end tablet based on the chip.

Intel's mobile struggles continued, with revenue from its Mobile and Communications Group down 83% year over year to $51 million.

Intel has been shipping its Atom mobile chips at a discount to tablet and phone makers in an attempt to get more device makers using its chips. But it's on track to meet its target of shipping 40 million tablet chips this year, Krzanich said, including both Atom and certain Core processors.

The Data Center Group, which sells chips for servers, storage and networking equipment, saw revenue expand 19% to $3.5 billion.

Intel forecast revenue for its third quarter to be $14.4 billion, plus or minus $500 million.

Intel's second-quarter earnings easily beat Wall Street estimates, thanks to a quicker-than-expected turnaround in the PC market.

Agam Shah covers PCs, tablets, servers, chips and semiconductors for IDG News Service. Follow Agam on Twitter at @agamsh. Agam's e-mail address is agam_shah@idg.com

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