Intel shares were set to trade sharply higher on Friday after the company beat fourth-quarter earnings forecasts. The shares jumped 5% in pre-market trading.
Intel posted a loss of $687m with a $5.4bn one-off charge related to US tax changes factored in.
However, excluding the US tax charge and other exceptional items, the company reported earnings per share of $1.08 for the fourth quarter. Revenue rose 4.1% to $17.1bn versus $16.4bn in the prior year.
Both figures exceeded analysts´ projections, which called for a profit of 86 cents per share on revenue of $16.34bn, according to Thomson Reuters.
In common with the general trend, Intel also said the bottom line would benefit substantially over the longer term as a result of the Trump administration´s tax reforms, with the top rate of corporate tax falling from 35% to 21%.
Intel claimed its effective tax rate would fall to just 14% in 2018 following the tax changes.
The chipmaker, buoyed by strong operating performance and a long-term boost from the tax changes, also announced it was raising its dividend by 10%.
“The fourth quarter was an outstanding finish to another record year. Compared to the expectations we set, our revenue was stronger, our operating margins were higher, and our spending was lower," commented Bob Swan, Intel chief financial officer.
The company also beat forecasts on forward guidance, estimating 2018 revenue to reach $65bn, versus expectations of $63.7bn.
“The strategic investments we've made in areas like memory, programmable solutions, communications and autonomous driving are starting to pay off and expand Intel's growth opportunity. In 2018, our highest priorities will be executing to our data-centric strategy and meeting the commitments we make to our shareholders and our customers,” said Intel chief executive Brian Krzanich.