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Intel Tops Revised Estimates in 3Q

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 […]

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thumbnail Larry Barrett
Larry Barrett
Oct 13, 2010
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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 warningthat 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’ estimateswhen 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 splurgefor 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.

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thumbnail Larry Barrett

Larry Barrett is a freelance journalist and blogger who has covered the information technology and business sectors for more than 15 years. Most recently, he served as the online news editor for 1105 Media's Office Technology Group and as the online managing editor for SourceMedia's Investment Advisory Group publications Financial Planning, On Wall Street, and Bank Investment Consultant. He was also a senior writer and editor at Ziff Davis Media's Baseline Magazine, winner of the Jesse H. Neal National Business Journalism Award, and ZDNet. In addition, he's served as a senior writer and editor at prominent technology and business websites including CNET, InternetNews.com, Multichannel News, and the San Jose Business Journal.

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