The net income, excluding acquisition-related costs, was up 52 per cent from the third quarter of 1999, but down 18 per cent from the second quarter of this year. Revenue was up 19 per cent from the third quarter of 1999 and up 5 per cent from the second quarter, which also had set a quarterly record, Intel said in a release.
The per-share income result beat the consensus forecast of 38 cents by 24 financial analysts polled by First Call/Thomson Financial.
On Sept. 21 Intel warned that expected third-quarter earnings would be lower mainly due to weak demand in Europe. Intel said then that third-quarter revenue would be about 3 per cent to 5 per cent higher than second-quarter figures of $US8.3 billion.
Including acquisition-related costs, third quarter net income was $US2.5 billion, up 72 per cent from the third quarter of 1999 and down 20 per cent from the second quarter. Earnings per share were 36 US cents, up 71 per cent from 21 US cents in the third quarter of 1999 and down 20 per cent from the second quarter.
In the release, Craig Barrett, president and chief executive officer, said Intel achieved record revenue with 19 per cent growth in the third quarter despite challenges during the quarter brought on by PC demand in Europe that was weaker than expected.
Barrett said Intel anticipates record revenue in the fourth quarter, with growth across most of its product lines. The company is pleased with the growth of its server business, its record flash business, and its networking silicon business, he said.
In a conference call this afternoon, Intel executives said a number of economic difficulties that arose late in the third quarter in Europe threw off what the executives admitted were overly "aggressive and bullish" estimates.
"We were forecasting our best growth ever in Europe," said Andy Bryant, Intel senior vice president and chief financial and enterprise services officer. "We were on track through the first part of September. It dropped off after the Euro fell and people started blocking gas stations."
Those factors weakened consumer confidence, which affected demand for PCs. Quarterly revenue was at record levels in all other geographic areas, Bryant said.
Intel projects revenue growth in the fourth quarter of 4 per cent to 8 per cent with help from expected sales of hundreds of thousands of Pentium 4 processors. The Pentium 4 is expected to ship in the fourth quarter. Annual revenue growth will reach between 16 per cent and 18 per cent if Intel does as well as expected in the fourth quarter, officials said.