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A strong Q2 out for Intel

Shrugging off signs of weakness in the economy, the company issues a third-quarter forecast for better margins, higher sales.

The subprime mortage crisis is going from bad to worse. Oil is hovering near all-time highs. Global financial markets seem on the verge of melting down.

Intel CEO Paul Otellni Dan Farber/CNET News

And yet Intel just had itself one hell of a second quarter.

The company's second quarter earnings per share soared to 28 cents from 22 cents during the same period a year earlier. Intel posted $9.47 billion in revenue, up from $8.68 billion. In after hours, Intel shares were jumping on the strength of the forecast of between $10 billion to $10.6 billion in sales. The company also foresees gross margins at around 58 percent, plus or minus a couple of points.

In the current quarter, however, gross profit margins came in at 55.4 percent. Although that was up from 53.8 percent in the preceding quarter, it still remained just shy of the midpoint of earlier expectations. Not a huge surprise considering what's happening in the market--in particular the competition with Advanced Micro Devices for a bigger share of the lower-priced notebook PC business.

Still, the company can't complain. Intel received a big lift from the ongoing shift from desktop to notebook computers. In its release, the company noted that mobile microprocessor and chipset units both set records.

The company's conference call doesn't start until later this afternoon, but here's the canned quote which came along with the release.

"Intel had another strong quarter with revenue at the high end of expectations and earnings up substantially year over year," said Paul Otellini, Intel president and CEO. "As we enter the second half, demand remains strong for our microprocessor and chipset products in all segments and all parts of the globe."