More good news for Silicon Valley as Intel [INTC] reported a record quarter beating Wall Street estimates and its own prior guidance by about $800 million. Intel shares jumped 6% in extended-hours trading.

Sales were boosted by a return of IT spending as enterprises upgraded data centers and replaced older equipment.

Revenues grew 25% to $12.9 billion, and net income surged 34% compared with the year ago quarter.

All product areas showed growth across all geographies.

Intel also repurchased $4 billion of its shares. The company forecast a strong quarter and full year.

The only fly in the ointment was slightly higher R&D and manufacturing spending of $3.7 billion.

Here are the key numbers:

– PC Client Group revenue up 17 percent, Data Center Group revenue up 32 percent, other Intel architecture group revenue up 70 percent, and Intel® Atom™ microprocessor and chipset revenue of $370 million up 4 percent, all year-over-year.

– The average selling price (ASP) for microprocessors was up sequentially.

– Gross margin was 61 percent.

– R&D plus MG&A spending of $3.7 billion, slightly higher than the company’s expectation.

– The net gain of $213 million from equity investments and interest and other, consistent with the company’s expectation.

– The effective tax rate was 28 percent, in-line with the company’s outlook of 29 percent.

– The company used $4.0 billion to repurchase 189 million shares of common stock.

– During the quarter, the company closed the acquisitions of Infineon Wireless Solutions and McAfee, Inc. The combination of both acquisitions contributed revenue of $496 million.

[Cross-posted at Silicon Valley Watcher]