Intel's 3rd quarter 'solidly profitable'
NEW YORK -- In a nod to the shaky financial climate, Intel said it planned to publish a "midquarter business update" on Dec. 4. Intel has not done that in several years.
Intel, the world's largest chipmaker, provides microprocessors that power a range of consumer products, from PCs and laptops to wireless. Because of its size and reach, Intel's performance is viewed as a bellwether for the rest of the tech sector.
Intel indicated that consumer demand, at least in the third quarter, was healthy.
"Intel delivered the best third-quarter revenue in its history," declared CEO Paul Otellini in a prepared statement. "We were solidly profitable."
Net income rose 12% to $2 billion. Revenue increased 1% to $10.2 billion, an 8% improvement over the second quarter. Earnings-per-share rose 17% to 35 cents year-over-year.
Gross profit margins — a key indicator of Intel's health — rose to 58.9%, up from 55.4% in the second quarter. Intel attributed the increase to a combination of lower production costs and higher chip revenue.
Avi Cohen, head of research for Avian Securities in Boston, says Intel's numbers "aren't as bad as they could have been. They're better than our numbers and mostly in line with what everybody expected."
Because of its deep pockets, Cohen says, Intel is well-positioned to weather the economic storm. If the economic climate deteriorates further, he says, Intel could take advantage of the situation by putting its cash to use: It "could make some acquisitions," presumably at a good price, "further establishing its dominance in the microprocessor space."
Intel's earnings were released after the market closed, so it's unclear how Wall Street will respond. Shares rose about 4% in after-hours trading.
The company has been pushing hard on new areas of business, including wireless. It is backing an advanced wireless technology known as WiMax, which can turn large areas, even whole cities, into hot spots. It's also pushing hard to enter the "smart" device arena, which is growing thanks to the growing popularity of the Apple iPhone and other Web-enabled mobile devices.
