Intel Beats Q3 Expectations

Chip manufacturer Intel Corp. (Nasdaq: INTC) announced its third-quarter results last night, posting revenue of $8.5 billion, up 8 percent on the same period last year. Earnings per share (EPS) were 30 cents, up 20 percent on last year's third quarter.

Those figures exceeded analyst expectations of $8.44 billion and EPS of 27 cents.

The market responded positively to the Santa Clara, Calif.-based vendor's results. In early trading today, Intel shares rose 93 cents (4.59 %) to $21.21.

During a conference call, Intel executives said the quarters results had been buoyed by record server and mobile microprocessor shipments. However, they admitted that growth hadn't been as high as anticipated, due to inventory adjustments at some of the vendor’s major OEM customers and lower-than-expected overall demand for PCs.

Despite that disappointment, Intel fared better than its arch rival Advanced Micro Devices (NYSE: AMD), which recently announced third-quarter sales well below analyst forecasts (see AMD Announces Q3 Results).The past quarter has been a busy one for the server side of Intel's business, with the launch of a new Xeon processor for dual-processor servers. Intel president Paul Otellini said in the conference call that, so far, he is pleased with market acceptance of the new product and expects it to become a standard technology in this part of the server market.

There is plenty of blue-sky stuff going on at Intel at the moment. Looming on the horizon is a yet-to-be released family of Itanium processors, which was touched on briefly during the call. Code-named Montecito, the technology will have 1.7 billion transistors, multiple CPU cores, and 24 Mbytes of memory, execs said.

Otellini also explained that most of the microprocessors shipped during the quarter were built using Intel’s 90-nanometer production process. This is important because a nanometer (nm) is equal to one billionth of a meter, and, for next-gen micro-processing, small really is beautiful. Basically, the more transistors you can fit onto a small piece of silicon, the greater the computing power.

Intel also confirmed that its forthcoming 65nm manufacturing technology has been used to build fully functional 70-MB SRAM chips containing more than half a billion transistors. The 65nm technology is on track to be completed next year, with product shipments in 2006, the company said.

— James Rogers, Site Editor, Next-gen Data Center Forum0