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Intel Says Quarterly Profit Doubles

The firm reports record shipments from its microprocessor group on strong demand from India, Russia and China.

October 15, 2003|Terril Yue Jones | Times Staff Writer

Intel Corp. on Tuesday said strong overseas sales helped more than double the world's largest computer chip maker's third-quarter profit.

Santa Clara, Calif.-based Intel earned $1.66 billion on sales of $7.83 billion, up from $686 million on sales of $6.5 billion in the same quarter last year.

On a per-share basis, Intel earned 25 cents, up from 11 cents last year. It beat by 2 cents the consensus estimate of 30 financial analysts surveyed by Thomson First Call.

"Our resolve to invest aggressively during the downturn is paying off with double-digit revenue growth and a doubling of profit compared to a year ago," said Chief Executive Craig Barrett, who added that the company would spend about $4.3 billion this year on research and development.

The profit was driven by Intel's microprocessor group, which supplies the electronic brains of more than 80% of the world's personal computers. The company reported record shipments of processors, chipsets and motherboards.

Much of the demand was from developing countries such as Russia, India and China, Chief Financial Officer Andy Bryant said.

"We've always said [information technology] spending in mature geographies would lag a recovery," he said. "We're seeing the effect of the strong economies and the quicker return to purchases. In the mature economies, it's a little bit slower."

Nonetheless, analysts were encouraged by the growth.

"Over the last couple quarters we've seen a stabilizing of the PC business -- not back to the boom days of the '90s, but back to a more normal, planned buying pattern," said Steve Kleynhans, a technology analyst with the market research firm META Group. "We've seen to a large extent that consumers buy when they're confident, and when they see something cool and interesting to buy. People are feeling a little more confident."

Rick Whittington, a semiconductor analyst with the brokerage American Technology Research, said Intel's performance indicates that California's economy remains vibrant. Californians, he said, "just voted out a governor for a weak economy, but here's a bellwether company for the American economy with a ringing increase in profitability, with more to come."

Intel's fourth-quarter revenue is expected to be $8.1 billion to $8.7 billion, Bryant said during a conference call with financial analysts.

Intel shares rose 28 cents to $31.08 during regular Nasdaq trading before the earnings release. They gained an additional 87 cents in after-hours trading.

Associated Press was used in compiling this report.

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