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Intel and Yahoo profits beat estimates

Intel Corp and Yahoo Inc reported profit that beat analysts' estimates, helping allay investor concerns that faltering demand and lower prices may curb earnings growth. Shares of both companies rose.

Intel, the world's largest maker of computer chips, is seeing "pretty solid" demand, chief financial officer Andy Bryant said on Tuesday after the California-based company reported a 25 percent rise first-quarter profit.

Yahoo raised its forecast for this year's revenue after reporting a 55 percent jump in quarterly sales.

The results doused worries sparked by IBM and Samsung Electronics Co, which reported profit shortfalls last week.

Intel, which is stepping up spending in anticipation of rising demand, signaled computer hardware sales are still robust.

Yahoo's better-than-expected profit and higher forecast augurs well for rival Google Inc, which reports today.

"The world's not falling off a cliff," said Tim Allen, a portfolio manager at Wentworth Hauser & Violich, a Seattle based firm with US$5.5 billion under management, including Intel shares.

"There was nothing worse than anyone thought," he said.

Shares of Intel, down 3.3 percent this year, rose US$0.73 to US$23.36 in extended trading.

Yahoo shares rose US$1.62, or 4.9 percent, to US$34.84, and Google rose US$7.85 to US$199.25.

The Dow Jones Industrial Average rebounded earlier yesterday from a low for the year, posting its first advance in five days, on optimism results this week would show concern was unwarranted.

EMC Corp and Texas Instruments Inc this week also beat estimates, indicating IBM's problems don't reflect a broader slowing of technology spending, said Chuck Jones, an analyst at Stein Roe Investment Council in San Francisco.

EMC, the world's biggest maker of data storage, on Tuesday said profit almost doubled. That followed a day after Texas Instruments forecast second-quarter profits above analyst estimates.

"There was a huge amount of uncertainty last week," said Jones, who helps manage US$15 billion including Intel shares.

Intel, whose microprocessors run more than 80 percent of the world's personal computers, said first quarter profit rose 25 percent as demand surged for its Centrino laptop chips and the company boosted production.

Net income rose to US$2.15 billion, or US$0.34 a share, from US$1.73 billion, or US$0.26, a year earlier. Sales rose 17 percent to US$9.43 billion, Intel said in a statement after the close of markets on Tuesday. Profit and sales beat analysts' estimates.

"After Intel, my tone is definitely changed," said Jim Grossman, who helps manage US$63 billion at Thrivent Financial in Appleton, Wisconsin.

"I'm going to sit back in my chair, take a deep breath and just say `Whew,"' he said.

Intel sped up production to tap demand for products such as the Centrino laptop chips. Faster output made each chip less costly to produce, allowing Intel to beat its quarterly margin forecast and raise its estimate for margins this year.

California-based Yahoo said its profit more than doubled as the company raised prices and sold more advertising.

Net income rose to US$204.6 million, or US$0.14 a share, from US$101.2 million, or US$0.7, a year earlier, Yahoo said in a statement. Sales surged 55 percent to a record US$1.17 billion.

The profit topped the average estimate of US$0.11 a share from 26 analysts surveyed by Thomson Financial and Yahoo raised its forecast for this year's sales to US$3.57 billion to US$3.72 billion from a previous estimate of US$3.37 billion to US$3.57 billion.
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