Intel earnings beat estimates, shares jump

Intel reports Q2 earnings

Intel shares rallied after the firm reported quarterly earnings and revenue that beat analysts' expectations on Tuesday, citing stronger-than-expected demand for corporate PCs.

After the earnings announcement, the company's shares rose more than 4 percent in extended-hours trading. (Click here to get the latest quotes for Intel.)

The company posted second-quarter diluted earnings of 55 cents per share on $13.83 billion in revenue.

Analysts had expected the company to report earnings, excluding items, of 52 cents a share on $13.69 billion in revenue, according to a consensus estimate from Thomson Reuters.

The California-based chipmaker said its gross margins for the second quarter widened to 64.5 percent versus 59.6 percent in the first quarter, while its PC client group revenue grew to $8.7 billion, up 9 percent sequentially and up 6 percent year-over-year.

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"We've articulated a long-term margin range of 55 to 65 percent. We're obviously right at the high end of that. … Our goal is to keep margins in that range and grow the business," Intel CFO Stacy Smith on CNBC's "Closing Bell" Tuesday.

"What you're seeing is our strategy playing out nicely in the first half. We're generating financial growth … You can see some strength in the PC market. I think we're being successful in re-inventing the PC. "

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On a sour note, Intel said its mobile and communications group revenue dropped 67 percent sequentially, to $51 million, while its software and services operating segments revenue declined 1 percent sequentially to $548 million.

For the current quarter, the company expects revenue to come in at $14.4 billion, plus or minus $500 million. Analyst polled by Thompson Reuters were expecting revenue of $14.03 billion.

It also said it expects gross margins to come in at 66 percent, plus or minus a couple of percentage points, during the third-quarter.

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The firm forecast full year revenue to grow about 5 percent, which is slightly higher than it previously expected.

"We're moving into tablets, we're moving into more mobile PCs, we're moving into thinner, lighter form factors. That's where the market's going and that's where the company's going," Smith said.

A recent computer buying binge among businesses has led the firm to hint it will present its first revenue boost after several periods of steady decline tied to falling PC sales, according to the Wall Street Journal.

CEO Brian Krzanich has recently pushed the company into making chips for non-computer devices, especially directed at the maker movement of hobbyists and do-it-yourself engineers, according to Re/Code.

—By CNBC's Karma Allen. CNBC's Michelle Fox contributed to this report.