Intel Q3 Profits Fall Sharply But Shares Rise before Bell

Intel Corp.’s third quarter profits and revenues both have plummeted by around eight percent, but the world’s largest semiconductor chipmaker has still managed to beat the Wall Street’s forecasts comfortably.

The company on Tuesday announced that its net income for the quarter ending on September stood at $1.9 billion, or 33 cents a share, down from $2.06 billion, or 35 cents a share, registered during the same period a year ago.

Its revenues for the said quarter also plunged considerably to $9.4 billion, from $10.23 billion posted by the company a year ago. Nonetheless, the company has outdone the Wall Street’s predictions of revenues worth $9 billion, or 28 cents a share, depicting signs of recovery from the torrid economic recession.

Commenting upon the company’s satisfactory performance in the third quarter, Paul Otellini, Intel’s president and the chief executive, said: “This momentum in the current economic climate, plus our product leadership, gives us confidence about our business prospects going forward”.

This drop in the profits can largely be attributed to recent drop in prices for its microprocessors range, as the company claimed that except its Atom processor, all of its processors were priced lower than what they were in the second quarter.

However, for the fourth quarter, Intel has projected revenues in the tunes of $10.1 billion, as compared to $8.2 billion posted by the company last year.

Our Comments

Intel, together with Microsoft, is seen by many as the bellwether of the technology market. If Intel boosts significant profits, this means that new computers are selling well, that people are going online and are buying technology products. The last few quarters have been depressing but the latest figures by the world's largest semiconductors company show that the worst is behind us now.

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