The chip industry is recovering from its worst ever downfall

Intel, the world's largest maker of microprocessors, has reported stronger-than-expected earnings for the three months to June.

The group, which narrowed its earnings expectations last month, said earnings in the three months to 28 June had doubled from a year ago.

It credited strong sales of its Pentium microprocessors in particular and said it was now raising its budget for research and development.

The strong results from Intel - seen by investors as a bellwether for the technology industry because of its size - cheered investors in after hours trading.

Researching the future

Intel said earnings for the three month period rose to $896m (�563m;802m euros) or 14 cents per share from $446m a year ago.

"Overall, the quarter came in slightly better than we expected, led by good demand in our computing-related business," said chief executive Craig Barrett.

"We continued to see strength in emerging markets, and our Asia-Pacific region set an all-time revenue record," he added.

Analysts had been expected a figure nearer 13 cents per share, and shares immediately jumped 70 cents to $21.80 in after hours trading.

Beating expectations

Revenue rose to $6.8bn (�4.2bn;6bn euros) from $6.32bn a year earlier, at the top of the group's own estimates, made in early June, of between $6.6bn and $6.8bn.

At the time, the company - the world's largest semi-conductor maker - said demand for communications chips was 'soft' as companies struggling with a weak economy tightened their spending.

But the group predicted further gains later this year, forecasting earnings of $7.5bn for the current three year period.

Intel also said it would increase its spending on research and development, raising the target from $4bn to $4.2bn.