Notebook demand boosts Intel's Q2 revenue estimate

Strong notebook sales helped boost Intel's Q2 revenue expectations, which are now as high as $9.3 billion.

Intel's revenue for its current fiscal quarter may be slightly higher than expected, thanks in part to strong demand for laptop computers. The chipmaking giant has said that it now expects sales to be as high as $US9.3 billion for the quarter, up from the previously expected ceiling of $US9.2 billion.

In April, Intel had said that revenue would land somewhere between $US8.6 billion and $US9.2 billion for the quarter, which ends on July 2. Now it has revised that guidance, saying that revenue would come between $US9.1 billion and $US9.3 billion.

Intel was seeing better-than-expected sales in all regions of the globe, the company said. But chief financial officer, Andy Bryant, singled out sales of notebook computers in particular.

"The real story is that the strength is in mobile," he said. "We expected it to be stronger when we began the quarter, and it's done even better than we expected."

Sales of notebook computers are expected to grow at about three times the pace of desktop PC sales over the next few years, according to IDC. The industry research company estimates that worldwide notebook shipments will grow by 19.4 per cent this year, compared with a 6 per cent growth rate for desktops.

PC vendors would ship just over 130 million desktops in 2005, compared to about 52 million notebooks, IDC predicted.

Investment income for the quarter would be $US30 million more than expected, and the company also would get a tax break during the quarter, due to better-than-expected research and development tax credits, Intel said.

It is also saving a little in its transition to the 65-nanometer technology, which will debut next year in the Yonah Pentium M processor.

Start-up costs for these 65-nanometer chips, which will have smaller features than the 90-nanometer processors currently being shipped, have been a few million dollars less than expected, Bryant said.

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Robert McMillan

IDG News Service
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