The chipmaker’s shares rose 3.9 percent in extended trade after posting results. Intel said it increased its share buyback program by $20 billion and plans to repurchase about $4 billion of stock in the current quarter.
Returning more profits to shareholders suggests Intel has become more confident about the outlook for the PC industry, said Bernstein analyst Stacy Rasgon.
“My presumption would be that if they’re confident enough to boost it that they see this (PC market) upside maintaining,” Rasgon said. “God help them if they’re wrong.”
Investors have pushed shares in PC mainstays Microsoft and Intel to decade-highs, partly on bets that the global slump in PC demand that began with Apple’s launch of the iPad in 2010 may have hit bottom.
Intel said in a statement on Tuesday it expects third-quarter revenue of $14.4 billion, plus or minus $500 million. Analysts had expected $14 billion on average, according to Thomson Reuters I/B/E/S. The Santa Clara, California company also said it expects full year revenue to grow about 5 percent, slightly higher than prior expectations.
Revenue from Intel’s PC group rose 6 percent in the quarter while its data center group, a big contributor to gross margins, had revenue jump 19 percent.
Intel has made little progress expanding from the tepid PC industry into chips for smartphones and tablets. For the second quarter, Intel said its mobile and communications group’s revenue fell 83 percent to $51 million and had an operating loss of $1.12 billion.
Intel’s second-quarter revenue was $13.8 billion, compared with $12.8 billion in the year-ago quarter. In June, Intel revised increased its second-quarter revenue outlook to $13.7 billion, plus or minus $300 million, citing stronger-than-expected demand for PCs used by businesses. Intel posted second-quarter net income of $2.8 billion, or 55 cents a share, compared with $2.0 billion, or 39 cents a share, in the year-ago quarter.
Intel shares closed up 0.70 percent at $31.71 in regular trade on Nasdaq- Reuters