Intel reported a better-than-expected 9.1% rise in quarterly revenue, helped by improving PC demand and growth in its data center and cloud businesses.
The world's largest chipmaker said it expects fourth-quarter revenue to be $15.7 billion, plus or minus $500 million. Analysts on average were expecting revenue of $15.86 billion, according to Thomson Reuters I/B/E/S.
Intel's shares were down 3.9% at $36.29 in after-hours trading on Tuesday.
Revenue from the data center business, which offers storage and cloud-based software services, rose 9.7% to $4.54 billion in the third quarter, from a year earlier.
Demand for cloud-based services has been growing as more businesses shift to cloud-computing methods.
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Revenue from the company's traditional PC business, which still accounts for over half of Intel's total revenue, rose 4.5% to $8.89 billion.
According to research firm IDC, global PC shipments fell by a smaller-than-expected 3.9% in the third quarter. (http://bit.ly/2dIkLfi)
Excluding items, the company earned 80 cents per share, above analysts' average estimate of 73 cents.
The company's net revenue rose to $15.78 billion from $14.47 billion, beating the average analyst estimate of $15.58 billion.
Net income rose to $3.38 billion, or 69 cents per shares, in the third quarter ended Oct. 1, from $3.11 billion, or 64 cents per share, a year earlier.
Up to Tuesday's close, Intel's shares (intc) had risen 9.6% this year, lagging the 22.8% gain in the broader Philadelphia semiconductor index.