Intel raises Q3 revenue expectations to $15.3 billion to $15.9 billion as PC sales brighten

Intel said today that third-quarter revenue is expected to be above the company’s previous outlook, with revenue now expect to come in at $15.3 billion to $15.9 billion as PC sales improve.

Previously, the world’s biggest chip maker said that it had expected revenue of $14.4 billion to $15.4 billion. The increase in revenue is primarily driven by replenishment of PC supply chain inventory. The company is also seeing some signs of improving PC demand. That’s a rare sign of positive news for the company, which is in the midst of cutting 12,000 jobs from its payroll.

The company is forecasting the midpoint of the third-quarter GAAP gross margin range at 62 percent, plus or minus a couple of points, up 2 points versus the prior third-quarter GAAP outlook gross margin midpoint of 60 percent, driven mostly by higher PC unit volume. The midpoint of the third-quarter non-GAAP gross margin range is now forecasted at 63 percent, plus or minus a couple of points, up 1 point versus the prior third-quarter non-GAAP outlook gross margin midpoint of 62 percent.

Third-quarter research and development plus MG&A spending is expected to be approximately $5.2 billion, $100 million higher than the prior expectation of approximately $5.1 billion. Third-quarter gains and losses from equity investments and interest and other income are expected to be a net loss of approximately $125 million, as compared to the prior expectation of a net loss of approximately $75 million. The tax rate for the third quarter is expected to be 22 percent, as compared to the prior expectation of 21 percent.

The report could be a good sign for sales of Intel’s Kaby Lake processors, now known as 7th Generation Core processors. Intel announced shipments on August 31 and said PC makers would introduce lots of models based on the processors during September.