By Asa Fitch

Intel Corp. reported stronger earnings in the second quarter, buttressed by a work-from-home economy that spurred demand for computing power, but its shares tumbled in after-hours trading when it signaled a delay in its development of superfast chips.

Intel said Thursday its profit in the April-June period rose 22% from a year ago to $5.11 billion. Earnings per share were $1.19, rising from 92 cents a share last year and exceeding forecasts from analysts surveyed by FactSet. On an adjusted basis, EPS also rose to $1.23.

Second-quarter revenue rose more than 19% from a year earlier to $19.73 billion, coming in ahead of analysts' estimates.

But Intel revealed further delays of its seven-nanometer chip technology that underlies future generations of central processing units. The technology, Intel said, is now trending roughly 12 months behind internal targets.

Shares fell more than 10% in after-hours trading.

Santa Clara, Calif.-based Intel was among companies that withdrew its full-year earnings guidance amid the coronavirus pandemic, and it also suspended share buybacks and issued debt. But tech companies -- and the chip industry in particular -- have shown resilience because their products underpin the tools people are turning to for remote work, school and staying in touch with family.

Thursday, Intel gave an outlook for the third quarter and reinstated its full-year guidance. For the full year Intel said it expects to generate per-share earnings of $4.53 and $75 billion in revenue. But the third-quarter earnings guidance was weaker than Wall Street expected, as well as the implied fourth-quarter performance.

Despite those healthy sales, Intel's future isn't entirely secure. The company could lose a chunk of its processor sales -- amounting to roughly 3% of annual revenue, analysts say -- when Apple Inc. shifts away from Intel chips in its Mac computers to its own designs starting later this year.

And while Intel has struggled to move into mass production of its most advanced chips, rival chip maker Advanced Micro Devices Inc. has been challenging the company's dominance. AMD's market share in personal computer CPUs climbed above 17% in the first quarter, more than doubling from five years ago, according to Mercury Research. Intel holds almost all of the remaining market share.

Following Intel's earnings release, AMD's shares rose about 7.5% after hours. AMD is scheduled to release its second-quarter earnings report July 28.

Intel's struggles with seven-nanometer chips mirror delays in designing and producing its earlier generation of chips based on a 10-nanometer process, an industry term tied loosely to the size of transistors that chips use to make calculations. Intel executives have told investors in the past that once the company conquered its challenges in 10-nanometer technology, sizing down to seven nanometers and beyond could happen more quickly.

"The reason the stock has been a relative underperformer in the last couple years is the whole 10-nanometer thing, but that was finally starting to show some light," said Stacy Rasgon, an analyst at Bernstein Research. "And now we have to do it all over again."

There aren't any "fundamental roadblocks" with the design of seven-nanometer chips, Chief Executive Bob Swan told analysts on a conference call, adding that Intel had found the root cause of the issue and was taking steps to avert further delays. He said Intel could turn more to external manufacturers, perhaps in combination with its own factories, to meet customers' needs -- a significant shift for a company that has mostly relied on its own manufacturing muscle.

The seven-nanometer delay could harm Intel's competitive position because Taiwan Semiconductor Manufacturing Co., the largest contract manufacturer of chips in the world, is expected to be making processors with even smaller, more efficient transistors by the time Intel comes out with its chips. AMD and a wide range of other chip companies that compete with Intel use TSMC in making their chips -- although Intel could also tap TSMC if it moves to more external manufacturing.

The first shipments of Intel's seven-nanometer chips are now expected to take place for PC CPUs in late 2022 or early 2023, while initial shipments of data-center CPUs are expected in the first half of 2023, Mr. Swan said.

On top of its technological issues, Intel has been adding manufacturing capacity to address a shortage of its chips that led to an unusual apology letter sent to PC-maker customers in November. Chief Financial Officer George Davis said Thursday the company was on track to resolve its supply issues in the latter half of the year.

"We think we're going to be able to supply and claw back share and end the year with strong share growth in PCs," he said in an interview.

In the second quarter, Intel said sales in its division that focuses on data centers -- huge collections of computing power that drive the internet -- climbed 43%, reaching $7.1 billion.

The second half of the year, though, may not be as rosy for Intel's data-center business. Many data-center operators snapped up chips during the pandemic to deal with rising demand. The appetite from big companies and government customers was already easing, Mr. Davis said, even though consumer PCs remained strong.

"Some of the work-from-home, learn-from-home dynamics are still in play, even though at some point, the [gross domestic product] globally...will catch up, and we're assuming that'll happen in the second half," Mr. Davis said.

Sales of Intel products for personal computers also rose by 7% in the latest quarter, reflecting an opportunity in that market during the pandemic that Intel has seized despite its manufacturing problems.

During the second quarter, global shipments of desktops, notebooks and workstations grew 11.2% from the comparable year-earlier period to 72.3 million units, according to International Data Corp. figures.

On Tuesday, Texas Instruments Inc., another big chip maker, reported results that beat Wall Street forecasts and gave a better-than-expected outlook for the third quarter. Microsoft Corp. reported r ecord quarterly revenue Wednesday, driven by the work-from-home trend. Although International Business Machines Corp.'s quarterly revenue declined, it reported better-than-expected earnings on Monday.

Write to Asa Fitch at asa.fitch@wsj.com