Intel Corp’s third-quarter results on Tuesday offered some comfort for investors jittery about the weak state of the global computer market.
Net income rose 17 percent and revenues rose 29 percent, topping Wall Street targets.
Intel CEO Paul Otellini credited stronger sales of processors for laptop PCs and servers. Its stock rose 4 percent.
The company also boosted its stock buyback program by US$10 billion and offered strong revenue guidance for the all-important Western holiday fourth quarter.
Nonetheless, even as the numbers are encouraging for Intel, they are unlikely to reflect a meaningful change in the underlying dynamics that threaten to keep computer demand sluggish into the foreseeable future.
Debt worries, stubborn unemployment and the popularity of smartphones and tablet computers have depressed the market.
Numbers released last week by market researchers IDC and Gartner Inc showed that PC shipments worldwide grew in the third quarter, but at a pace that was slower than expected.
Hard drive makers Seagate Technology PLC and Western Digital Corp have also said that the flooding in Thailand is hurting their ability to meet demand for the critical PC components they make, while IBM Corp on Monday reported weaker-than-expected growth in its hardware division, which sells servers and mainframes to corporations.
In an interview, Intel’s Chief Financial Officer Stacy Smith described European markets as “pretty subdued” and said demand in the US during the quarter was merely “OK.”
However, emerging markets were strong as was corporate spending on Intel chips, he said. Smith cautioned there was uncertainty heading into the fourth quarter, but emphasized that spending in emerging markets and by corporations remains strong.
Smith said on a conference call with analysts that Intel might have taken some market share from Advanced Micro Devices Inc (AMD), Intel’s longtime rival. Last month, AMD cut its third-quarter guidance because of manufacturing problems with an important new chip.
Intel said its net income was US$3.47 billion, or US$0.65 per share, compared with US$2.96 billion, or US$0.52 per share, a year ago. Excluding special items, earnings were US$0.69 per share. Analysts polled by FactSet expected an adjusted US$0.62 cents per share.
Revenues were US$14.2 billion, compared with US$11.1 billion a year ago. Analysts expected US$13.9 billion.
For the fourth quarter, Intel predicts it will take in US$14.2 billion to US$15.2 billion in revenues. Analysts expected US$14.2 billion.
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