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Intel quarterly results beat Wall Street forecasts

by on15 July 2009

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Up 8 percent for the quarter

Intel Corporation projected quarterly results that far exceeded the predicted consumer demand for PCs, particularly in Asia. Intel, the world's largest chipmaker, saw its shares increase by 8 percent, which drove the Standard & Poor's 500 stock index futures SPc1 sharply higher.  Intel's microprocessors are used in more than three-fourths of the world's personal computers, so these results represent a barometer for the global PC sector of the industry.

The report also helped give technology stocks a nice increase and gave the stock of AMD, Intel’s rival, a nice 4 percent bump.  Intel projected that its third-quarter revenue will be between $8.1 billion to $8.9 billion, with analysts only forecasting its revenue at $7.8 billion. Intel’s CFO, Stacy Smith, indicated that the company’s Q4 gross margins were partly due to a decrease in production costs for new chip generations and that the gross margins might reach the high end of a "normal" range, which Intel defines as between 50 to 60 percent.

Consumer demand was very strong for PCs and far outspent corporate spending, which was also a bit of a surprise. "You have an $8 billion quarter with very little enterprise spending taking place," said Broadpoint Amtech analyst Doug Freedman. "The consumer is healthier than we expected….Intel has a much stronger seasonal second half. So the fact that Q2 is better than Q1 clearly puts the worst behind Intel."

Last modified on 15 July 2009
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