SAN FRANCISCO: Intel Corp forecast quarterly revenues well above Wall Street's estimates, defying fears the world's top chip maker is struggling to find its footing as personal computer sales growth wanes.
Sales held up strongly despite a hiccup in sales of its Sandy Bridge processors after the discovery of a chipset design flaw.
This eased fears that the growing popularity of smartphones and tablets would eat into the PC chip business.
Shares of Intel rose 3.5 percent in extended trading after closing up 1.22 percent on Nasdaq.
The stock has shed about 12 percent of its value since Apple Inc's first iPad hit store shelves in April last year, while the Standard & Poor's 500 Index has gained 11 percent.
"The PC Client Group revenue was much higher than anyone anticipated.
Everyone expected some poor numbers there due to the Sandy Bridge delays," said Avian Securities analyst Win Cramer.
Concerns that iPad tablets are squeezing traditional PC sales have hung over Intel, along with worries across the electronics industry about supply constraints after Japan's March 14 earthquake and tsunami.
Computer sales in the first quarter fell for the first time since 2009 as the iPad attracted buyers in droves and Japan focused on recovering from the earthquake and tsunami, according to research firm Gartner.
Tuesday's report was the first to include Intel's $7.68 billion acquisition of data security firm McAfee and its $1.4 billion purchase of Infineon's wireless unit. The fiscal first quarter also had one more week to it than usual.
With those additions, Intel said revenue in the current quarter would be $12.8 billion, plus or minus $500 million.
Analysts had expected revenue of $11.59 billion for the first quarter and $11.87 billion for the second quarter, according to Thomson Reuters I/B/E/S.
CFO Stacy Smith said he saw no hindrance to Intel's chip production despite supply constraints that are limiting the shipment and availability of electronics parts from Japan.
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