Intel beats forecasts with strongest growth in 20 years

Intel easily beat expectations in its Q2 result, posting what it said was its strongest growth spurt since 1988 and tipping an improved second half.

Its $8 billion revenue was down 15% year-on-year, but grew 12% sequentially, Intel said. Wall Street analysts had predicted revenue of $7.28 million, according to Barron's.

CEO Paul Otellini said the result was “the strongest first- to second-quarter growth since 1988 and a clear expectation for a seasonally stronger second half.”

Microprocessor shipments increased, but average selling price declined for every category but Intel's Atom brand. Despite this, gross margin was a higher than expected 50.8%.

The company posted a net loss of $398 million, due largely to the record $1.4 billion fine it was forced to pay to European antitrust regulators in My.

On a non-GAAP basis, net income was $1 billion – still $552 million lower than a year ago, but $420 million higher than during Q1 2009.

Intel's mobility group reported an operating income of $803 million on revenue of $3.48 billion.

Looking ahead to the third quarter, Intel expects to post revenue of around $8.5 billion, a gross margin of 53% and $40 million worth of restructuring and asset impairment charges.

The company plans to have spent $10.6-$10.8 billion on R&D and mergers and acquisitions - and $4.7 billion in capex - for the whole of 2009.

Intel’s stock on Nasdaq rose 7.25% to $18.05 in after-hours trading yesterday.