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Rebounding PC market lifts Intel earnings

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

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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 US$2.8 billion for the second quarter of 2014, up 40 percent from the same quarter last year, the company said.

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

Shipments from Intel's PC Client Group expanded 9 percent as it shifted more Haswell- and Bay Trail-based processors. Revenue from the division was up 6 percent 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 percent from the same quarter a year ago. That's the slowest quarterly decline in two years, and much better than the 7.1 percent 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 percent 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 percent to $3.5 billion.

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

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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