Intel Tops Revised Estimates in 3Q

Chipmaker managed to hurdle its own watered down estimates and provides a better-than-expected outlook for fourth quarter.


You Can't Detect What You Can't See: Illuminating the Entire Kill Chain

On-Demand Webinar

Intel managed to top its own downwardly revised estimates in the third quarter, posting a profit of $3 billion, or $0.52 a share, on sales of $11.1 billion.

Analysts surveyed by Thomson Reuters pegged the Santa Clara, Calif.-based semiconductor giant for a profit of $0.50 on sales of $11 billion. However, that consensus estimate was dramatically revised after Intel (NASDAQ: INTC) in August issued a rare warning that sluggish PC demand in "mature markets" would clip third-quarter sales and profits.

Originally, Wall Street was predicting a profit of $0.53 a share on sales of $11.5 billion.

In the third quarter of 2009, Intel posted a profit of $1.86 billion, or 33 cents a share, on sales of $9.4 billion. The $11.1 billion in sales marks the first time the company has eclipsed the $11-billion threshold in a three-month span.

"These results were driven by solid demand from corporate customers, sales of our leadership products and continued growth in emerging markets," CEO Paul Otellini said in a statement. "Intel's third-quarter results set all-time records for revenue and operating income."

Looking ahead to the fourth quarter, Intel told analysts to expect sales of $11.4 billion, give or take $400 million, which puts the company in good position to top analysts' current forecast of a little more than $11.3 billion in the quarter.

"Looking forward, we continue to see healthy worldwide demand for computing products of all types, and are particularly excited about our next-generation processor, codenamed Sandy Bridge," Otellini added.

Last quarter, Intel easily hurdled analysts' estimates when it reported a profit of $2.9 billion, or $0.51 a share, on sales of $10.8 billion.

In the quarter, Intel said its PC group sales rose 3 percent from the second quarter to more than $8 billion, led by strong demand for mobile chips. Its data-center sales were also up 3 percent sequentially to $2.1 billion, while sales of its Atom microprocessor and chipsets fell 4 percent to $396 million.

The unusual profit warning came between a pair of massive merger announcements: its $7.7 billion purchase of security software vendor McAfee and its $1.4 billion splurge for Infineon's wireless chip unit.

Intel shares closed up $0.21 a share, or 1 percent, to $19.77 ahead of the earnings report before climbing another $0.20 a share in after-hours trading.

Larry Barrett is a senior editor at InternetNews.com, the news service of Internet.com, the network for technology professionals.

Tags: earnings, chips, Intel, hardware, Paul Otellini

0 Comments (click to add your comment)
Comment and Contribute


(Maximum characters: 1200). You have characters left.



IT Management Daily
Don't miss an article. Subscribe to our newsletter below.

By submitting your information, you agree that datamation.com may send you Datamation offers via email, phone and text message, as well as email offers about other products and services that Datamation believes may be of interest to you. Datamation will process your information in accordance with the Quinstreet Privacy Policy.