Intel has reported its best ever quarterly results, with a net income of $2.9 billion for Q2 driving US and Asian markets higher as investors responded to one of the strongest indications yet that a recovery is underway.
The semiconductor maker reported earnings for the three months ending on 30 June smashed analyst expectations and dramatically turned around losses of $398m for the same period a year ago.
The world's leading chip maker saw earnings rise 34 per cent quarter-on-quarter to $10.8 billion well ahead of the $10.25 billion forecast by an expectant Wall Street and outdoing even the company's own predictions three months ago of between $9.8 billion and $10.6 billion.
With Intel's fortunes seen as a bellweather for the wider technology industry, and corporate America in general, markets responded strongly to the news, which added significant weight to the belief that a recovery is now very much under way after recent struggles.
In New York, the Dow Jones Industrial Average closed 146.75 points higher on 10,363.02, while the S&P 500 climbed 16.59 to close at 1,095.34. In after-hours trading, Intel's own shares were trading seven per cent higher than the start of the day.
"Strong demand from corporate customers for our most advanced microprocessors helped Intel achieve the best quarter in the company's history," chief executive Paul Otellini revealed in his earnings report.
Other markets also reacted positively.
With Intel processors inside an estimated four out of every five new computers, other technology companies also reaped the benefit of Intel's news. In Asia, computer makers such as Lenovo, Sony, Asus, Acer and Toshiba all saw their share prices jump, while overall Japan's Nikkei Stock Average climbed 2.5 per cent.
The year-on-year comparison to a difficult Q2 2009 is largely affected by the record 1 billion anti-trust fine European regulators slapped on the semi-conductor firm
Otellini downplayed fears that fragile economic confidence would affect sales in the months to come, suggesting that there was every sign of an industry-wide recovery.
"The PC and server segments are healthy and the demand for leading-edge technology will continue to increase for the foreseeable future," Otellini said.
