Santa Clara (CA) – Intel continues to make progress in its effort to increase revenues and profit in a time of cut-throat competition in its core business. The company said that its revenues increased by 8% year-over-year, from $8.00 billion to $8.68 billion. Net profit jumped by 44% from $885 million to $1.28 billion in the same time frame.

On a sequential basis, revenues were down 2% from Q1 ; the firm’s net profit declined by 22%. For the first six months, Intel’s revenue is up from $16.95 billion in 2006 to $17.53 billion in 2007. Profits have improved from $2.24 billion to $2.91 billion. Intel’s cash reserves and short-term investments now stand at $8.93 billion.

Among the key results for the quarter, Intel noted that microprocessor shipments were up, but average selling prices were down. The company did not say whether this was a result of a shift in product mix or mainly attributable to the ongoing price war with AMD. Chipset units reached a new record level, while demand for NOR flash and motherboards was lower than expected, the company said.

Looking ahead, Intel expects Q3 revenues to be between $9.0 and $9.6 billion. The company expects to slightly increase its R&D spending, up from $5.6 billion to &5.7 billion ; Capital expenditures, which include construction costs for fabs are expected to decrease from $5.5 billion to $4.9 billion in 2007, the company said.