Intel Corp's profit leaped 43 percent in the third quarter as a massive restructuring and surging microprocessor demand helped the world's largest semiconductor company glide past Wall Street's already-bullish expectations.
The Santa Clara-based chip maker said on Tuesday it earned US$1.86 billion, or US$0.31 per share, last quarter. That beat by a penny the average estimate of analysts surveyed by Thomson Financial, and it is 43 percent higher than the US$1.3 billion, or US$0.22 per share, Intel earned in the year-ago period.
Intel is profiting from robust worldwide PC sales that are driving up demand for microprocessors, which act as the brains of those computers.
On a conference call on Tuesday to discuss the earnings report, management dismissed concerns by some analysts that PC makers may have overestimated their need for microprocessors and ordered too many chips. Officials said the firm expects demand to remain robust and justified their higher financial targets.
Intel also announced that chief financial officer Andy Bryant was named chief administrative officer, effective immediately. His replacement as CFO is Stacy Smith, an Intel employee since 1988 whose latest job was assistant CFO.
Higher sales of microprocessors helped the company offset flat average selling prices. Revenues for the period were US$10.09 billion, a 15 percent jump from the US$8.74 billion in sales rung up last year.
The sales surprise helped jolt Intel's stock. Analysts were expecting US$9.62 billion in revenues, a figure already boosted by a surprise mid-quarter financial update by Intel last month that came the same day as smaller rival Advanced Micro Devices Inc (AMD) launched its highly touted new Opteron brand server chip.
While it is competing fiercely for market share with AMD, Intel has also been aggressively cutting costs, including the elimination of 10,500 jobs, about 10 percent of its work force, announced in September last year, to save about US$3 billion annually by next year. Intel said in April that it had completed the restructuring but would continue to look for ways to cut costs.
On the conference call, management said Intel is shrinking its work force by another 2,000 employees and aims to exit the fourth quarter with 86,000 workers worldwide.
``We've made remarkable improvement,'' Bryant said in an interview before the report was released. ``All things are going pretty well right now.''
Fourth-quarter sales are expected to reach US$10.5 billion to US$11.1 billion, topping analysts' forecasts of US$10.42 billion.