Shares of Intel jumped more than 4% in extended trade as the chipmakers improved forecast lifted hopes for a PC industry that been shrinking due to consumers preferences for tablets and smartphones.
Intel said it now expects second-quarter revenue of $13.7 billion, plus or minus $300 million. Intel had previously forecast revenue of $13 billion, plus or minus $500 million.
The chipmaker said it expects some revenue growth for the full year, compared with its previous forecast of flat revenue.
The Santa Clara, California company also raised the mid-point of its gross margin forecast range for the second quarter, which ends at the end of June, by 1 point to 64%.
With personal computer shipments falling for eight straight quarters through March, some analysts have suggested the industrys decline is close to hitting bottom, potentially giving Intel breathing room as it struggles to develop better processors for mobile and wearable devices.
Demand from companies for PCs likely received a boost recently due to Microsofts winding down of support in April for its Windows XP operating system, analysts say.
PCs have been getting less bad for a while, said Bernstein analyst Stacy Rasgon. But if its all business PCs then the question is going to be sustainability.
Intels revised revenue and gross margin forecasts for the June quarter could translate to earnings per share of 52 cents, RBC analyst Doug Freedman said in a note to clients.
For the second quarter, analysts on average had expected EPS of 47 cents and revenue of $13.02 billion, according to Thomson Reuters I/B/E/S. Intel is expected to report its second-quarter results on July 15.