The world's # 1 maker of semiconductors reports 3Q results that are in line with Street estimates
October 12, 2004: 4:42 PM EDT
NEW YORK (CNN/Money) - Intel, the world's largest manufacturer of semiconductors used in personal computers and servers, reported third-quarter sales and earnings that were roughly in line with Wall Street's diminished expectations.
Shares rallied after-hours even though the company provided guidance for the fourth quarter that was slightly below analysts' estimates.
The Santa Clara, Calif.-based company reported net income of $1.9 billion, or 30 cents a share, up 15 percent from a profit of $1.7 billion, or 25 cents a share a year earlier.
Analysts had been expecting Intel to post a profit of 27 cents a share according to Thomson/First Call. However, the company said that a lower than anticipated tax rate and reduced tax provision boosted earnings per share by 3.6 cents. Backing that out, Intel reported earnings of about 26 cents a share.
Intel's sales came in at $8.5 billion, 8 percent higher than a year ago and slightly higher than Wall Street's lowered expectations of $8.44 billion. Intel warned in September that its third-quarter sales would come in much lower than the $8.6 billion to $9.2 billion it had originally forecast in July.
Shares of Intel (Research) fell 33 cents, or 1.6 percent to $20.28 in regular trading on the Nasdaq Tuesday. The stock has plunged more than 36 percent this year on concerns about rising inventories and slowing growth. Intel now trades just 3 percent above its 52-week low.
But the stock rose nearly 3 percent in aftermarket trading, according to INET.
In a written statement, Intel said that weaker than anticipated demand for PCs and inventory adjustments by its customers hurt third quarter revenues, which rose just 5 percent from the second quarter. Typically, third quarter revenues for Intel are about 8 percent to 9 percent higher than the second quarter due to strong PCs sales in the back-to-school shopping season.
Intel said that sales for the fourth quarter would be between $8.6 billion and $9.2 billion. The $8.9 billion mid-point is lower than the $9.07 billion in revenues that analysts had been predicting.
Still, Wall Street may have been pleased by the fact that Intel's inventories dipped about 1 percent from the end of the second quarter, to $3.18 billion. Intel had reported double-digit percentage sequential inventory increases in both the first and second quarters of this year, sparking fears of a possible glut of chips that the company would have to write-down or sell at a steep discount.
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