Intel Corp has provided some insight into the state of global PC demand, telling Wall Street that while technology spending may be slumping, the chip maker fully expects its profits to hold steady.
The Santa Clara, California-based company, the world’s largest maker of PC microprocessors, said on Tuesday that its third-quarter profit rose 12 percent, beating analysts’ estimates.
The increase was driven in large part by technological advances that lower Intel’s cost of making each chip, which helps the company wring out more profits even in tough economic times.
Sales, in fact, rose just 1 percent, helped by a 20 percent jump in revenues from laptop microprocessors, but were held down overall by lower sales of desktop and server microprocessors. Intel missed the consensus revenue estimate by about US$40 million.
Wall Street was already expecting that Intel’s third-quarter results would be in line with analyst forecasts, since a spending freeze by many corporate information technology departments did not fully emerge until late in the quarter, when the financial crisis worsened dramatically.
As the first major tech company to report earnings for the July to last month period, investors were looking to Intel for signs about the health of the overall sector heading into the holiday season and next year.
Intel cautioned that economic turbulence makes it hard to reliably predict fourth-quarter results. But the company still forecast healthy and relatively unchanged profit margins.
That was seen as a sign things might not get as bad as some market-watchers fear.
Net income for the three months ended Sept. 27 was US$2.01 billion, or US$0.35 per share. That compares with US$1.79 billion, or US$0.30 per share, from the year-ago period, the company said. Analysts surveyed by Thomson Reuters expected US$0.34 per share in profit.
Sales were US$10.22 billion, just a 1 percent increase over last year, but Intel said the figure was a record for the third quarter. Analysts expected US$10.26 billion.
Stacy Smith, Intel’s chief financial officer, said because of the economic uncertainty, Intel plans to update investors in early December, ahead of the formal fourth-quarter report, about the company’s finances.
“We have a high degree of uncertainty around demand in the fourth quarter, but our execution is good,” he said in an interview.
While Intel is thriving, its smaller rival, Advanced Micro Devices Inc, is planning to spin off its factories to cut costs. AMD announced last week that it’s partnering with the Persian Gulf state of Abu Dhabi in the joint venture.
The deal is an acknowledgment that AMD cannot compete alone against Intel in the very expensive chore of semiconductor manufacturing.
AMD reports its third-quarter results today. Analysts are expecting a loss of US$0.40 per share on US$1.48 billion in sales.
Intel chief executive Paul Otellini warned that it’s “hard to know” what impact the financial crisis would have on demand for Intel’s chips in the fourth quarter. Still, Otellini said he expects Intel to “out-pace peer companies” during the period because of its sales momentum and strong products and balance sheet.
Intel predicted a gross profit margin of 59 percent of revenues, plus or minus a couple of percentage points, in the fourth quarter.
MORE VISITORS: The Tourism Administration said that it is seeing positive prospects in its efforts to expand the tourism market in North America and Europe Taiwan has been ranked as the cheapest place in the world to travel to this year, based on a list recommended by NerdWallet. The San Francisco-based personal finance company said that Taiwan topped the list of 16 nations it chose for budget travelers because US tourists do not need visas and travelers can easily have a good meal for less than US$10. A bus ride in Taipei costs just under US$0.50, while subway rides start at US$0.60, the firm said, adding that public transportation in Taiwan is easy to navigate. The firm also called Taiwan a “food lover’s paradise,” citing inexpensive breakfast stalls
TRADE: A mandatory declaration of origin for manufactured goods bound for the US is to take effect on May 7 to block China from exploiting Taiwan’s trade channels All products manufactured in Taiwan and exported to the US must include a signed declaration of origin starting on May 7, the Bureau of Foreign Trade announced yesterday. US President Donald Trump on April 2 imposed a 32 percent tariff on imports from Taiwan, but one week later announced a 90-day pause on its implementation. However, a universal 10 percent tariff was immediately applied to most imports from around the world. On April 12, the Trump administration further exempted computers, smartphones and semiconductors from the new tariffs. In response, President William Lai’s (賴清德) administration has introduced a series of countermeasures to support affected
CROSS-STRAIT: The vast majority of Taiwanese support maintaining the ‘status quo,’ while concern is rising about Beijing’s influence operations More than eight out of 10 Taiwanese reject Beijing’s “one country, two systems” framework for cross-strait relations, according to a survey released by the Mainland Affairs Council (MAC) on Thursday. The MAC’s latest quarterly survey found that 84.4 percent of respondents opposed Beijing’s “one country, two systems” formula for handling cross-strait relations — a figure consistent with past polling. Over the past three years, opposition to the framework has remained high, ranging from a low of 83.6 percent in April 2023 to a peak of 89.6 percent in April last year. In the most recent poll, 82.5 percent also rejected China’s
PLUGGING HOLES: The amendments would bring the legislation in line with systems found in other countries such as Japan and the US, Legislator Chen Kuan-ting said Democratic Progressive Party (DPP) Legislator Chen Kuan-ting (陳冠廷) has proposed amending national security legislation amid a spate of espionage cases. Potential gaps in security vetting procedures for personnel with access to sensitive information prompted him to propose the amendments, which would introduce changes to Article 14 of the Classified National Security Information Protection Act (國家機密保護法), Chen said yesterday. The proposal, which aims to enhance interagency vetting procedures and reduce the risk of classified information leaks, would establish a comprehensive security clearance system in Taiwan, he said. The amendment would require character and loyalty checks for civil servants and intelligence personnel prior to