Net earnings for the period were just under US$2 billion, or 32 cents per share, on overall revenue of US$9.96 billion. That compares with earnings of US$1.91 billion, or 30 cents per share, on revenue of US$8.47 billion in the same period in 2004.
Analysts expected Intel to earn 33 cents per share, according to a survey by Thomson First Call.
Third-quarter net income and earnings per share were influenced by Intel's US$300 million patent infringement settlement with MicroUnity. Intel said it will charge US$140 million now and amortise the remaining US$160 million over the next 10 years.
An increase in taxes of approximately US$250 million, equivalent to 4 cents per share, related to the decision to repatriate foreign-earned income under the American Jobs Creation Act (Jobs Act), also bit into Intel's earnings per share, the company said.
The third-quarter numbers are still in line with Intel's earlier estimates. During its midquarter update, the chipmaking giant said it expected its revenue for July, August and September to be in the range of US$9.8 billion to US$10 billion.
At the close of regular trading, Intel shares were up 1.11 percent or 26 cents to US$23.72. The earnings report was issued after the close of regular trading.
Intel CEO Paul Otellini pointed to a boost from processors that power notebooks and highlighted the launch of the company's new dual-core Xeon processors ahead of schedule and the first shipment of chips built on its 65-nanometer process technology.
"The combination of our 65nm manufacturing network, broad range of new dual-core processors and unique ability to provide platform solutions positions us well for continued growth," Otellini said in a statement.
Notebooks have become a significant profit centre for Intel. In the first quarter of this year, notebook chips accounted for 30 percent of Intel's output. That figure is expected to rise to about 33 percent next year, Intel has said.
Two analyst firms on Monday increased their forecasts for the PC and server market for the next three months, which bodes well for Intel. IDC boosted its annual forecast for shipment growth to 17.1 percent, well over the 13.3 percent growth rate the research firm predicted in August.
Research firm Gartner, meanwhile, expects shipments to grow at 17.2 percent for the year. Roughly 200 million desktops, notebooks and x86 servers will leave factories this year, according to Gartner.
Earlier this week, Intel demonstrated a new technology, called Robson, designed to reduce the time it takes to boot up a PC or a laptop.
For its fourth quarter, Intel said it expects revenue to be between US$10.2 billion and US$10.8 billion. Gross margin percentage for the next three months is expected to be approximately 63 percent, plus or minus a couple of points, as compared to 59.7 percent in the third quarter.
