Intel results, outlook trump expectations

By Alexei Oreskovic

SAN FRANCISCO (Reuters) - Intel's (INTC.O) quarterly results and outlook blew past Wall Street forecasts on better-than-expected consumer demand for PCs, especially in Asia, setting an auspicious tone for the technology sector.

Shares of Intel, the world's largest chipmaker, jumped 8 percent on the report, driving Standard & Poor's 500 stock index futures sharply higher and bolstering technology shares such as arch rival Advanced Micro Devices (AMD.N).

Intel projected third-quarter revenue at $8.1 billion (4.96 billion pounds) to $8.9 billion, compared with analysts' average forecast of $7.8 billion, according to Reuters Estimates.

"They guided gross margins for the third quarter of 53 percent and the whisper was 50 percent to 51 percent. A nice way to kick off earnings season for tech companies," said Patrick Wang, an analyst at Wedbush Morgan.

Excluding charges for a European antitrust fine, Intel said it earned 18 cents a share in the second quarter, beating the average forecast of 8 cents according to Reuters Estimates.

Revenue in the three months ending June 27 was $8 billion, down 15 percent year-over-year, but well above the average forecast of $7.27 billion expected by analysts.

Chief Financial Officer Stacy Smith told Reuters that computer markets were strengthening and there were "pockets of relative strength" in consumer PC markets, as well as in the Asia Pacific region and in China.

But Smith noted that the corporate market remains weak and said Intel does not expect much of a change in the second half of the year.