Intel reported net income of $2 billion, or 35 cents per share, for
the third quarter, up from $1.8 billion and 30 cents a year ago.
Revenue was $10.2 billion for its third quarter, up 1 percent over the
same quarter a year ago. (statement) Analysts had expected the company to report earnings of 34 cents a share on revenue of $10.25 billion.
Paul Otellini, Intel president and CEO, said in a statement:
“As we look to Q4, it is hard to know what impact the
financial crisis will have on end customer demand. We are confident
that our product portfolio, strong cash flow, commitment to deploying
new technology and market momentum will allow us to outpace peer
companies at a time when business levels are difficult to predict.”
updated: In a call with analysts today, Otellini
said there were mixed signs for the outlook into the fourth quarter,
largely because of the uncertainty surrounding the current market
conditions. Corporate sectors are expected to be soft as IT feels the
impact of the economic conditions. Consumer side traffic is also
expected to be light, but he noted that interest in notebooks and
netbooks is strong. Likewise, the company acknowledged the changing
economic conditions and the uncertainty of the impact on Intel. It said
it would host a formal mid-quarter update on Dec. 4 to provide an
update on financial conditions and business trends of the quarter. At
this point in the economic crisis, it’s hard to predict - at this point
- what impact the crisis will have, executives said.
The company forecast fourth-quarter gross margin at about 59
percent, mostly flat compared to the third quarter. Revenue was also
adjusted lower than previously expected, to a broader range of $10.1
billion to $10.9 billion.
In a note to investors last week, Wachovia Capital Markets
highlighted several factors that could continue to support Intel’s
business – even as the global economic environment changes. From the
report:
Strong notebook growth: We believe that
the strong secular trend for notebooks will allow this segment of the
PC market to react with greater resiliency to the current economic
environment. Even if there is fairly significant deceleration in
growth, we think that the notebook market might still hold in at 25-30%
growth, excluding low-cost notebooks, in the second half of this year.Atom: Over the last couple of months, several
notebook manufacturers have introduced new low-cost notebooks which
feature the Atom processor. We think Intel probably shipped several
million Atom chips in the September quarter, representing roughly $100
million or more of incremental revenue.Stable pricing: In the past year, AMD has made a
number of significant price cuts, particularly in the desktop space,
while Intel has not responded with any major price cuts of its own. We
believe that Intel’s pricing stability, relative to AMD’s, has been
sufficiently justified by a steady rollout of new and improved
microprocessor products.
Shares of Intel were down more than 6 percent in regular trading,
closing at $15.93. Shares were on the upswing in after-hours trading,
up more than four percent to $16.59.
Source : http://blogs.zdnet.com/
