Intel Corp. shares weakened in the extended session Thursday after the chip maker topped expectations, but its outlook barely surpassed the average forecast from Wall Street analysts.

Intel 
INTC,
-0.48%

 shares were last down more than 3% in the extended session, following an initial 3% uptick in after-hours trading. Shares closed down 0.5% in the regular session at $55.96.

Intel reported second-quarter net income of $5.06 billion, or $1.24 a share, compared with $5.11 billion, or $1.19 a share, in the year-ago period. After adjusting for acquisition-related expenses and other items, Intel reported earnings of $1.28 a share, compared with $1.23 a share from a year ago.

Revenue declined to $19.63 billion from $19.73 billion in the year-ago quarter, for a fourth straight quarter of year-over-year revenue declines, but topped its own and analysts’ estimates. Excluding the company’s memory business, revenue was $18.5 billion. Analysts had estimated adjusted earnings of $1.07 a share on revenue of $17.81 billion, while Intel had forecast adjusted earnings of $1.05 a share on revenue of $18.9 billion, or $17.8 billion when removing the memory business it was divesting.

“Our second-quarter results show that our momentum is building, our execution is improving, and customers continue to choose us for leadership products,” said Intel Chief Executive Pat Gelsinger in a statement.

For the third quarter, Intel forecast revenue of about $19.1 billion, or $18.2 billion when removing the memory business, and GAAP earnings of $1.08 a share and non-GAAP earnings of $1.10 a share. Analysts on average expected adjusted third-quarter earnings of $1.09 a share on revenue of $18.11 billion.

Read: The chip crunch marches on, but one sector could be in store for relief

Intel’s data-center group revenue declined 9% to $6.5 billion, while analysts surveyed by FactSet expected $5.84 billion.

Intel’s largest segment — client-computing, the traditional PC group — rose 6% to $10.1 billion, with analysts expecting $10.03 billion.

Intel reported that nonvolatile memory-solutions revenue fell 34% to $1.1 billion, while Wall Street expected $690.8 million, and “Internet of Things,” or IoT, revenue rose 47% to $984 million, compared with an expected $901.5 million. Mobileye revenue soared 124% to $327 million, but the Street had expected $361.4 million.

Read: Why chip stocks are falling despite semiconductor shortage, strong early earnings

Over the past 12 months, Intel stock has fallen 8%. Over the same period, the Dow Jones Industrial Average 
DJIA,
+0.07%

 — which counts Intel as a component — has gained 29%, the S&P 500 index
SPX,
+0.20%

has climbed 33%, the tech-heavy Nasdaq Composite Index 
COMP,
+0.36%

 has advanced 37%, and the PHLX Semiconductor Index 
SOX,
-0.89%

 has surged 55%.

On Wednesday, Texas Instruments Inc.
TXN,
-5.32%

kicked off earnings season for U.S. chip makers, topping Wall Street estimates but confusing some analysts with a conservative guidance amid a global semiconductor shortage.

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