Intel earnings beat Wall Street predictions

The chipmaker's third-quarter revenue comes in at $9.4 billion, beating analysts' expectations, which hovered at just more than $9 billion.

Updated at 3:10 p.m. PDT: adding comments from CEO Paul Otellini and CFO Stacy Smith.

Intel's third-quarter revenue jumped $1.4 billion over the second quarter, though year-to-year revenue and profit comparisons were down.

The world's largest chipmaker is struggling to lead the PC industry out of a brutal downturn that saw demand collapse earlier in the year.

Revenue came in at $9.4 billion, beating Wall Street expectations, which hovered at just more than $9 billion. Revenue, however, was down from the $10.2 billion reported in the year-earlier period.

On a year over year basis, revenue for the third quarter was down 8 percent, Intel said in a statement, adding that this was an improvement over the 15 percent and 26 percent year over year declines in the second and first quarters respectively.

Intel shares were up more than 5 percent after hours, trading as high as $21.45 form a regular closing price of $20.49.

"Overall (corporate) enterprise remains weak," said CEO Paul Otellini in the company's earnings conference call.

Profits were $1.9 billion, or 33 cents per share, down from the third quarter of last year, when Intel posted a profit of $2.0 billion, or 35 cents a share. But the 33 cents beat analyst forecasts, which were 28 cents per share.

The chipmaker's gross margin for the quarter, a crucial earnings indicator, was 57.6 percent, higher than the company was projecting.

Looking ahead, Intel expects revenue to hit $10.1 billion, "plus or minus $400 million," in the fourth quarter, and gross margin to improve to 62 percent, plus or minus 3 percentage points.

Intel also said the average selling price for microprocessors was slightly down sequentially.

Inventories were also down $315 million sequentially. Intel chief financial officer Stacy Smith said inventories were a little lower than Intel would like and that Intel intends to increase inventories in the fourth quarter.

About the author

Brooke Crothers writes about mobile computer systems, including laptops, tablets, smartphones: how they define the computing experience and the hardware that makes them tick. He has served as an editor at large at CNET News and a contributing reporter to The New York Times' Bits and Technology sections. His interest in things small began when living in Tokyo in a very small apartment for a very long time.


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