Pat Gelsinger

Horacio Villalobos | Corbis News | Getty Images

Intel shares fell 1% after CEO Pat Gelsinger’s second earnings report at the helm of the American chip giant.

Intel reported sales and earnings per share that exceeded both its own forecasts and Wall Street’s expectations, thanks to the strength of its business unit, which makes chips for personal computers. Intel said PC sales were up 33% year over year.

Here’s how Intel fared against Refinitiv’s consensus estimates for the quarter ended June:

Earnings per share (EPS): $ 1.28 (adjusted) vs. $ 1.06 expected, 12% more than last year

Revenue: $ 18.5 billion (adjusted) versus $ 17.8 billion expected, 2% more than last year

Intel has raised its guidance for 2021 by $ 1 billion to $ 73.5 billion in adjusted revenue and full year earnings per share of $ 4.80. Intel’s results suggest that a boom in computer sales that began during the Covid-19 pandemic could continue even as people return to offices and schools.

Gelsinger welcomed the results in a statement as evidence of a turnaround. “Our second quarter results show that our momentum is increasing, our execution is improving, and customers continue to choose us for leading products.”

A highlight was Intel’s Client Computing Group, which includes chips for PCs, and had sales of $ 10.1 billion, up 6% year over year.

However, the company’s second largest segment, data center chips, had sales of $ 6.5 billion, down 9% year over year.

Another highlight for the chip giant was Mobileye, its autonomous driving subsidiary, which posted 124% annual sales to $ 327 million. While it’s still small compared to PC and server chips, Intel hopes it can become a major supplier to self-driving cars, and announced earlier this week that it would be testing autonomous vehicles in New York City.

Gelsinger has announced plans for Intel to transform itself by making chips for other companies, in addition to using contracted chip factories called foundries to make some of its own processors as well.

But the turnaround plan proposed by Gelsinger has already encountered obstacles. In June, Intel delayed the release of its next-generation server processor to early 2022, suggesting it is still struggling to keep up with the competition. Also in June, Intel’s server boss Navin Shenoy left the company after 26 years as part of a restructuring that also resulted in new business areas.

Intel may consider acquisitions to accelerate Gelsinger’s plan.

The company is in early talks with Abu Dhabi sovereign wealth fund Mubadala to buy GlobalFoundries, a major American chip foundry, CNBC has confirmed, although no deal has been promised. According to Reuters, Intel has also considered acquiring SiFive, a company that develops silicon based on open-source RISC-V technology, which is an alternative to the ARM instruction set currently dominating mobile chips.

CNBC’s Alex Sherman contributed to this report.