Intel stock soars 5% after announcing the $1 billion sale of its smartphone modem business to Apple and reporting numbers that crushed Wall Street estimates (INTC, AAPL)

• Intel said Apple is buying its smartphone modem chip business for $1 billion.
• Intel shares were rallying after the chip giant reported better-than-expected results, including a strong outlook.
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Intel shares rallied more than 5% late Thursday after the company said Apple was buying its smartphone modem chip business for $1 billion. The company also reported second quarter results and a forecast that exceeded Wall Street expectations. 

Intel said Apple will acquire the majority of Intel's smartphone modem business, valued at $1 billion. About 2,200 Intel employees will join Apple, as well as intellectual property, equipment and leases. The deal is expected to close in the fourth quarter of this year.

Intel also reported a profit of $4.2 billion, or 92 cents a share, on revenue of $16.5 billion, compared to a profit of $5 billion, or $1.05 a share,  on sales of $17 billion in the year-ago quarter. Adjusted profit was $1.06 a share. 

Analysts were expecting income of 89 cents a share of revenue of $15.7 billion. 

For the third quarter, Intel said it expects earnings of $1.24 a share on revenue of $18 billion. Intel also said it expects income of $4.40 a share on revenue of $69.5 billion for the full year. 

Wall Street was expecting the chip giant to report a profit of $1.16 a share on revenue of $17.72 billion. For the full year, analysts were projecting a profit of $4.24 a share on revenue of $68.34 billion.

With a weakening PC market, Intel has focused increasingly on the more lucrative market for chips that power data centers and the cloud. But the company posted disappointing results last quarter, highlighted by a downbeat full-year revenue target. Intel's data center business also recorded its first revenue decline in years. 

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