Tuesday revealed one of its best sales quarters since the dot-com implosion citing record sales of its chipset units and motherboard units.
The Santa Clara, Calif.-based firm reported third-quarter revenue of $7.8 billion and earnings per share were 25 cents up 79 percent over last quarter and up 150 percent from $0.10 in the third quarter of 2002.
The chipmaker had offered a bullish forecast at mid-quarter pledging its revenue would hit between $7.6 billion to $7.8 billion. Analysts had expected $7.69 billion in revenue and 23 cents a share, according to a consensus at Thomson First Call.
“Intel delivered excellent results in the quarter led by global strength in our computing-related business, resulting in record unit shipments of microprocessors and chipsets,” Intel CEO Craig Barrett said in a statement. “Our resolve to invest aggressively during the downturn is paying off with double-digit revenue growth and a doubling of profit compared to a year ago.
The company is the biggest supplier of semiconductors for the world’s personal computers, and so its results are a bellwether for the technology sector.
Intel was so pleased by its Q3 results it is now predicting revenue in the fourth quarter will be between $8.1 billion and $8.7 billion, with adjustments due during the mid-quarter update in early December.
“Our product and technology leadership make us well positioned to take advantage of improving demand. Going forward, our strategy remains the same: Invest in leading-edge capacity, develop innovative new products, and target growth opportunities worldwide.”
Much of Intel’s success is tied into an apparent PC recovery. But analysts are still not sure whether that reflected the long-awaited start of a cycle of customers’ replacing older machines or merely a strong back-to-school season.
Regardless, Intel is enjoying a monster year, doubling in value over the past eight months. Skepticism still persists, however, especially when it comes to corporate spending. The company failed to point to any significant pickup in demand among corporate computer buyers when it raised its guidance. Analysts say a rebound in that area would really get investors to sit up and take notice.
Intel said its own capital spending for 2003 is expected to be between $3.6 billion and $3.7 billion, as compared to the previous expectation of $3.5 billion to $3.9 billion.
The company said its expenses (R&D plus MG&A) in the fourth quarter are expected to be between $2.2 billion and $2.3 billion. Intel said certain marketing- and compensation-related expenses, would be based directly on its revenue and profits.
Some of that R&D has been slated to construct an assembly and test facility in the city
of Chengdu in China’s western Sichuan Province. Construction of the $200-million first phase of the facility is expected to begin in the first half of 2004, with operations scheduled for 2005, the company said.
The company Achilles’ heel remains its demand for chips used in communications products. Intel said revenue in this area remains soft amid slack sales of mobile products.
The company did highlight that its Flash memory