Intel Bolsters Hopes For PC Rebound
Intel Corp. served up evidence that the computer market is healthier than many people suspected, reporting third-quarter results that were well above upbeat projections it issued several weeks ago.
The chip giant predicted business conditions will improve even more in the current quarter, including a jump in its closely watched gross profit margin to the highest level since late 2005. It predicted revenue of about $10.1 billion, up about 7% from the third period.
Intel, maker of the chips that act as electronic brains in personal computers, is seen as an early proxy for changes in PC demand because manufacturers typically stock up on chips to prepare for sales to their customers.
Intel executives said they saw signs of strong purchasing of laptop PCs, led by back –to-school purchases in the U.S. and demand from consumers in China.
The company’s third-quarter profit and revenue remained about 8% lower than the same quarter in 2008, before the recession took hold. But revenue was up 17% from the second quarter, and profit – excluding a $1.45 billion antitrust fine levied by the European Union – was up 77% over the same period.
“It’s a nice indication of what we can achieve when the market is cooperating and we are executing well,” said Stacy Smith, Intel’s chief financial officer, in an interview.
Intel reported in come for the period ended Sept. 26 of $1.86 billion, or 33 cents a share, compared to profit in the year-earlier period of $ 2.01 billion, or 35 cents a share.
Revenue declined to $9.39 billion from $10.22 billion
Intel in late August predicted that its third-quarter revenue would be about 6% higher than it estimated the prior month, citing improving chip demand. The numbers reported Wednesday were 4% higher than the revised projection, and also higher than analysts’ average estimates.