Intel posts record revenue, but cautions
Economic uncertainty added a somber note to the chipmaker's earnings statement. The fourth quarter, Intel said, could see consumers and businesses deferring purchases.
Intel posted a record $10.2 billion revenue in third-quarter revenue, but the chipmaker is casting a wary eye on the fourth quarter ahead.
The largest chipmaker said net income was $2 billion, up 12 percent over the same period last year, on earnings per share of 35 cents. Thomson Reuters had expected Intel to post 34 cents per share in profit on $10.3 billion in revenue. Last year, Intel posted third-quarter revenue of $10.1 billion and net income of $1.9 billion on earnings per share of 31 cents.
Intel CEO Paul Otellini was quick to caution. "As we look to Q4, it is hard to know what impact the financial crisis will have on end customer demand," he said.
The company also said that due to "the uncertain economic environment, Intel intends to publish a mid-quarter business update this quarter." To that, it added this warning: "Current uncertainty in global economic conditions pose a risk to the overall economy as consumers and businesses may defer purchases in response to tighter credit and negative financial news, which could negatively affect product demand and other related matters."
Gross margin--a crucial indicator--hit 58.9 percent, up from 55.4 percent in the second quarter. The increase was driven primarily by lower microprocessor unit costs and higher microprocessor revenue, Intel said.
However, gross margin for the fourth quarter is forecast at about 59 percent, virtually flat compared to the third quarter. Also, revenue is forecast at between $10.1 billion and $10.9 billion--a range lower than earlier anticipated.
Microprocessor and chipset units both set records.
Revenue from Intel Atom microprocessors and chipsets was $200 million.
The total microprocessor average selling price (ASP) was lower sequentially.
Revenue was up 8 percent sequentially