Intel, the world’s largest chipmaker, has reported considerably stronger-than-expected second-quarter results, due in part to strong sales of its Atom chip for netbooks and other mobile computers, reports the Financial Times. The silicon giant – considered a bellweather stock for the wider technology industry – reported second-quarter revenues of US$8 billion, up 12 percent over the previous quarter and well ahead of analyst expectations of US$7.23 billion. Profit reached US$0.18 per share, easily exceeding a consensus forecast of US$0.8 per share. “Intel’s second quarter results reflect improving conditions in the PC market segment with our strongest first- to second-quarter growth since 1988 and a clear expectation for a seasonally stronger second half,” Intel CEO Paul Otellini said in a statement. Shares in the company rose 7 percent to US$18.05 in after-hours trading in New York yesterday.

Sales of Intel’s Atom microprocessor in 2Q09 hit US$362 million, a rise of 65 percent over the previous quarter, helping to offset demand for its enterprise microprocessors, which remained weak. In an interview with Investor’s Business Daily, Stacy Smith, Intel’s chief financial officer, said reliance on the lower-cost Atom chip would not affect company margins. “I can ship a lot of Atoms and not bring down the gross margin of the company,” he said. “In terms of gross margin, we saw volume go up and costs down. And we had lower excess capacity in our factories.” The Atom chip is seen as a central part of Intel’s plan to replicate its success in the PC chip market in the mobile space, and is also expected to be a key element in its recent landmark agreement with Nokia.