The Santa Clara, California-based chipmaker on Tuesday said it earned US$1.9 billion, or 30 cents per share, on sales of US$8.5 billion for the quarter that ended September 25. Those figures included a tax benefit of 3.6 cents per share.
Analysts expected Intel to report revenue of US$8.4 billion in revenue and earnings per share of 27 cents, an estimate that likely excluded the tax benefit.
While the company saw record shipments in server and notebook processors and market share increases in flash memory, lower-than-expected PC sales offset those gains, according to the company.
Revenue rose 5 percent from the US$8 billion figure in the second quarter, while net income rose 8 percent from US$1.8 billion. Typically, Intel sees a rise of around 6 percent to 12 percent in sales from the second to third quarter. Still, the third-quarter figures bested those from last year. Then, Intel reported US$7.8 billion in revenue and US$1.7 billion in net income, or 25 cents in earnings per share.
For the fourth quarter, Intel said revenue should come in between US$8.6 billion and US$9.2 billion, which earlier in the year was the expectation for the typically weaker third quarter. Gross margin for the fourth quarter should come in at 56 percent.
In September, Intel said it expected to post revenue of between US$8.3 billion and US$8.6 billion for the three-month period, with a midpoint at US$8.45 billion.
Although worldwide PC shipments are still expected to grow by more than 10 percent this year, some of the momentum from earlier in the year has slowed, which has affected Intel.
In July, the company predicted it would garner between US$8.6 billion and US$9.2 billion, leaving the midpoint at US$8.9 billion, for the September quarter.
The shortfall came as a result of lower-than-expected sales after an August price cut. Intel Chief Financial Officer Andy Bryant said the chipmaker likely failed to properly account for the processor inventory at PC makers left over from the second quarter.
Rival Advanced Micro Devices also appears to be siphoning off some microprocessor business. The company in October said that its profit for the quarter came to US$43.8 million largely because of a rise in microprocessor shipments and an increase in the average selling prices of these chips.
Sales for AMD's computation products group came to US$673 million in the third quarter of 2004, a 34 percent increase from the same period a year ago when revenue for the division came to US$503 million.
On the other hand, AMD saw flash memory revenue and operating profit decline sequentially, particularly in handsets. The flash business had been growing, in part because of earlier Intel missteps that the chipmaker had vowed to correct.
