Intel, the world's largest semiconductor maker, posted quarterly net income that topped Wall Street expectations, reflecting improved demand from Asia and stronger sales of pricier chips for laptops and servers.
Intel also forecast higher fourth-quarter revenue in line with bullish Wall Street expectations, but cautioned that while consumer spending was picking up corporations remained conservative in new investment on technology.
Intel said cost-cutting and the release of new products drove a 150 per cent year-over-year rise in third-quarter net income, while strong sales of more expensive chips for laptops and servers pushed its gross margin to 58.2 per cent.
That margin could improve to 60 per cent or so in the current quarter as revenue and factory utilization rates both rise, Intel said.
Analysts said the results vindicated the markedly more optimistic expectations of technology investors, but said the company's outlook also underscored Intel's caution about the strength of the recovery in the months ahead.
Intel reported net income for the third quarter was $1.7 billion, or 25 cents per share, more than doubled the $686 million, or 10 cents per share, posted a year earlier.
Revenue for the quarter was $7.8 billion, up 20 per cent from $6.5 billion a year ago and topping the company's own forecast.
Intel saw strong sales in so-called emerging markets, including China, Russia and India in the third-quarter, while sales in the United States grew by a smaller margin.
Investor expectations for the chip industry have been steadily advancing in recent months on stronger-than-expected consumer sales and a more upbeat outlook from companies.
Shares in Intel have risen nearly 100 per cent since the beginning of the year, outperforming the Nasdaq Composite, which is up about 45 per cent, and the Philadelphia Stock Exchange semiconductor index, which is up 64 per cent.