Intel, Yahoo report strong revenue growth

Exterior view of Intel Corp. headquarters in Santa Clara, California on Tuesday. Strong demand for notebook computers powered by Intel Corp chips helped boost third quarter profits by 5 percent. PHOTO: AP

Computer chip giant Intel Corp and Internet powerhouse Yahoo Inc reported strong third-quarter revenue growth Tuesday -- solid financials that coincided with new evidence on the surging growth in computer shipments worldwide.

Intel said it earned a net US$2 billion in the third quarter as revenue climbed by 18 percent to US$9.96 billion. But the Silicon Valley stalwart warned that fourth-quarter sales would fall below expectations, sending Intel stock down 2.2 percent to US$23.20 in after-hours trading.

Asia -- especially China and India, but excluding Japan -- was the segment leader in revenue growth, with sales in the region increasing by 28 percent compared to the year-ago quarter, Chief Financial Officer Andy Bryant told analysts during a conference call. The region accounted for 52 percent of Intel's revenue, compared to 19 percent generated from the Americas and 20 percent from Europe.

Intel said it shipped a record number of chipsets that control communication between the processor and the rest of the computer, but the company continues to struggle to meet demand, Bryant said. Chipset supply constraints are expected to continue into the fourth quarter, he said, but will hopefully ease thereafter as the company adds production capacity.

Intel Chief Executive Paul Otellini said he expects Intel's dual-core products to be a main driver of revenue growth for the fourth quarter. Since Intel launched the product line last month, it has shipped 1 million units, and the company expects to ship "millions" more in the fourth quarter, he said.

Intel said it expects revenue of US$10.2 billion-US$10.8 billion over the crucial year-end holiday period. Analysts were expecting US$10.7 billion.

Meanwhile Internet media company Yahoo reported third quarter profit of US$253.8 million, up slightly compared with the same quarter a year ago.

The company said sales rose 47 percent to US$1.33 billion as new services such as Yahoo Finance and Yahoo Music attracted more advertising dollars.

The results were interpreted as vindication of the company's ambitious policy to generate more original content.

Yahoo's net revenue, which excludes the portion of revenue that Yahoo shares with partners, reached US$932 million, beating analysts' expectations of US$918 million.

A further sign of the company's strong performance was that last year's third-quarter results were bolstered by its sale of shares in its rival Google.

Yahoo is perfectly positioned to capitalize on the trend because its Web site has built the largest US audience after its first decade in existence. Yahoo attracted 99.3 million unique US visitors last month, according to Nielsen/NetRatings, a research firm.

"Our ongoing ability to execute against plan and utilize our industry-leading technology continues to position us for long-term growth," Yahoo Chairman Terry Semel said.

Yahoo released the results after the stock market closed on Tuesday. The company's shares fell US$0.46 to close at US$33.70 on the NASDAQ Stock Market, then gained US$0.05 in extended trading.

The solid growth of the two companies came as research firms Gartner and IDC both reported worldwide growth in PC shipments of 17 percent.