Intel turns unexpected profit, higher forecast as PC market slide slows
- The PC market improvement prompted Intel to forecast better margins for the third quarter, adding nearly US$9 billion to the company’s market value
- Intel’s foundry business, which aims to make chips for other companies, reported revenue of US$232 million, up from US$57 million a year ago
Chip maker Intel on Thursday posted a surprise quarterly profit as a PC market slump started to ease, and forecast third-quarter earnings above
Wall Street expectations, sending its shares up about 6 per cent.
The market for personal computers has tumbled over the past year, with inventory piling up because consumers had already bought machines needed during the pandemic.
But the glut has started to ease, with PC shipments falling only 11.5 per cent in the June quarter compared to a 30 per cent slump in each of the previous two quarters, Canalys data showed.
The PC market improvement prompted Intel to forecast better margins for the third quarter. Its margins in recent quarters were nearly half its historical highs, but Intel said on Thursday it expects profit margins to improve in the second half of the year.
“Intel did outperform almost exclusively on the strength of desktop sales which rebounded from a near-record low last quarter,” said Edward Snyder, analyst at Charter Equity Research.