Profits at Intel, the world's largest manufacturer of computer chips, exceeded diminished expectations in the third quarter, as flagging sales in Europe cut into the company's revenue.
Allowing for exceptional costs associated with acquisitions, the company reported a 52 per cent rise in net profits compared with the same period a year earlier to $2.9 billion (€3.4 billion). That amounted to 41 US cents a share, ahead of the 38 cents forecast by analysts since a sales warning issued last month, but down 18 per cent on the second quarter.
Company revenues in the quarter hit $8.7 billion, a record. Revenue was up 19 per cent on the year-ago period but only 5 per cent ahead of the second quarter. Before the alert, analysts had been looking for an increase in sales of between 9 and 12 per cent.
Intel, which employs 4,400 people at its facility in Leixlip, Co Kildare, was hampered in the quarter by lower-than-expected growth, particularly in Europe and also, analysts have said, by market share gains by its scrappy rival Advanced Micro Devices. There are also concerns about the lack of pick-up ahead of the seasonally strong fourth quarter.
"We think again it could be a good, solid quarter but certainly we're not forecasting a blow-out," said Intel's chief financial officer Mr Andy Bryant.
It also said that gross margin - the percentage of revenue left after subtracting product costs - would be 63 per cent, plus or minus a point, down just slightly from the 64 per cent gross margin it had in the third quarter.
Intel shares were little changed at $36.18 3/4 on Nasdaq before the announcement, which came after the close of trading. They have plunged about 50 per cent in the past six weeks.
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