Wednesday, July 16th, 2008
Intel Surprises Wall Street With Record Second Quarter, Strong Global Outlook for Remainder of Year
From Staff Reports
Thanks to soaring worldwide demand for PC chips, Intel Corp. (INTC) late yesterday (Tuesday) reported a 25% jump in second-quarter profits and provided a forecast for sales that exceeded analyst estimates.
Intel - the world’s biggest chipmaker - said it earned $1.6 billion, or 28 cents a share, up from profit of $1.28 billion, or 22 cents a share, from the same period last year. Revenue was $9.47 billion, a 9% jump from sales of $8.68 billion for the same quarter a year ago.
Analysts had expected the Santa Clara, Calif. chip giant to report earnings of 26 cents a share on revenue of $9.3 billion, according to several earnings-estimate surveys.
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Third-quarter sales will range between $10 billion and $10.6 billion - well above the estimate of $10.01 billion reported by Bloomberg News. It also represents a rebound from earlier in the year, when Intel disappointed investors.
Sales of computer microprocessors were strong worldwide - at a time when analysts had become increasingly concerned about how the worldwide financial crisis would affect the high-tech industry, and especially computers.
Instead, Intel Chief Executive Paul Otellini said he’s seeing tremendous global demand for computer chips, has seen no fallout from the housing-led slowdown of the U.S. economy, and now expects that shipments of more-profitable laptop chips to overtake desktop processors for the first time ever this year.
“Intel had another strong quarter with revenue at the high end of expectations and earnings up substantially year over year,” Otellini said. “As we enter the second half, demand remains strong for our microprocessor and chipset products in all segments and all parts of the globe.”
Hans Mosesmann, a New York-based analyst for Raymond James & Associates (RJF), told Bloomberg News that investors should buy Intel shares, stating that “if the slowdown were that pervasive, Intel would already have seen it.”
Analyst Roger Kay of Endpoint Technologies Associates told MarketWatch.com that Intel had “a solid quarter.”
“Intel has product momentum now, widening the gap with competitors,” Kay said. “They’re stronger in notebooks and the market is shifting their way … I would think these results would tend to steady some of the volatility in the tech sector.”
News and Related Story Links:
- MarketWatch.com:
Intel reports 25% jump in quarterly profit. - Bloomberg News:
Intel Second-Quarter Profit Climbs 25% on PC Demand. - Money Morning:
Intel’s Weak Outlook Drags on Tech Sector
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