Worried that the ailing US economy has spilled abroad and hurt global PC sales, investors had subdued expectations for Intel in the second quarter.

Intel is the world's largest computer chip maker, and its fortunes rise and fall with swings in PC demand.

The Santa Clara, California-based company responded with a 25% jump in profit and record sales in the quarter, fueled by strong sales of processors for laptop computers.

The results easily beat analysts' expectations and reassured Wall Street that Intel is weathering the dreary domestic economy thanks to its broad international reach, a robust product lineup, and a manufacturing advantage over smaller rival Advanced Micro Devices Inc. that lowers Intel's cost of making chips.

Intel CEO Paul Otellini said demand for Intel's chips remains strong "in all segments and all parts of the globe." Three-quarters of Intel's business is outside the U.S.

Intel said its net income was $1.6 billion in the three-month period ending June 28. It was a 25% jump from the $1.28 billion that Intel earned a year ago.

Intel is profiting from surging global demand for laptops and the processors that power them, though lower prices for some of the fastest-growing models drove down Intel's closely watched average selling price in the latest quarter.

However, Intel can absorb the trend easier than AMD because Intel has made a faster switch to a new manufacturing process that lowers the cost of making each chip.

Intel is the world's No. 1 supplier of microprocessors, the electronic brains of personal computers. It commands about 80% of the market, with AMD owning roughly the other 20%.

Source:AP News