By Ted Greenwald

Intel Corp. posted an increase in first-quarter net profit as revenue was helped by an uptick in PC demand, though profit in its data center operations declined.

The company's earnings per share beat expectations by a penny and revenue edged in just below estimates.

Shares fell 2.8% in after-hours trading. Intel's share price generally has lagged behind that of its semiconductor peers, losing roughly 2% in the year to date.

Intel CEO Brian Krzanich said selling price strength across nearly every segment of the business in the quarter "demonstrates continued demand for high-performance computing, which will only increase with the explosion of data."

Intel dominates its core markets of processor chips for PCs and servers. But its overwhelming market share leaves limited room to grow, and competition lately has emerged in both areas. A revitalized Advanced Micro Devices Inc. is building momentum in the PC market and has plans to sell server chips. Meanwhile, processors from Nvidia Corp. have found a place in data centers, while chips based on technology from ARM Holdings PLC are beginning to make headway.

The PC market has been in a persistent decline, but PC shipments in the first quarter were better than expected. Research by International Data Corp. showed a marginal uptick in the first quarter, year on year, compared with its forecast of a 1.8% decline.

Intel benefited from the PC lift, posting a first-quarter operating profit of $3.03 billion in that segment, up 61% from the year-earlier quarter, on sales of $7.98 billion, a rise of 5.7%.

Anne Steele contributed to this article.

Write to Ted Greenwald at Ted.Greenwald@wsj.com

(END) Dow Jones Newswires

April 27, 2017 17:15 ET (21:15 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.
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