Intel has released second-quarter results that have significantly beaten analyst expectations.
The company reported sales of $8bn (£4.9bn) in the period, representing an overall loss of $398m (£243m) compared to a profit of $1.6bn (£977m) last year.
Some analysts had been predicting a $1bn (£610m) loss for the quarter, however, and the market took the announcement well. Intel shares rose eight per cent on the news.
"Intel's second-quarter results reflect improving conditions in the PC market segment, with our strongest first- to second-quarter growth since 1988 and a clear expectation for a seasonally stronger second half," said Intel president Paul Otellini.
"Intel's strategy of investing in new technologies and innovative products, combined with an ongoing focus on operating efficiencies, continues to yield benefits that are evident in our strengthening financial performance."
Intel felt comfortable enough for the first time in six months to issue earnings estimates, projecting third-quarter revenue of $8.1bn to $8.9bn (£4.9bn to £5.4bn).
The chip giant made special note of the impact on its results of a European Union fine, saying that the company would otherwise have turned in a profit. Intel was fined over $1bn (£610m) after being found guilty of anti-competitive behaviour, although the money will be held in escrow until appeals have been carried out.
The results suggest that the worst times for the tech industry may be over. Bob Johnson, vice president of research at Gartner, said that the bottom of the market had been reached, but warned that companies should not expect a dramatic increase in demand just yet.
Gartner said that demand for processors is expected to grow steadily until at least 2013, but that even then it will still be below the peak of 2007.
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