Tech momentum will lead recovery – Intel’s Otellini on strong Q3

14 Oct 2009

Intel has reported a strong third quarter with revenues of US$9.4 billion. The company’s president and CEO Paul Otellini said the growing importance of computing in people’s lives underscores how technology innovation is contributing to the economic recovery.

Intel, which employs more than 4,000 people in Ireland, reported operating income of US$2.6 billion, net income of US$1.9 billion and earnings per share (EPS) of 33 cents.

Innovation in technology

“Intel’s strong third-quarter results underscore that computing is essential to people’s lives, proving the importance of technology innovation in leading an economic recovery” said Otellini.

“This momentum in the current economic climate, plus our product leadership, gives us confidence about our business prospects going forward. As we look ahead, Intel’s game-changing 32nm process technology will usher in another wave of innovation from new, powerful Intel Xeon server platforms to high-performance Intel Core processors to low-power Intel Atom processors,” Otellini added.

Record production

During the third quarter, Intel said it recorded record microprocessor and chipset unit production and its mobility-group revenue was up 19pc, Digital Enterprise Group revenue up 14pc, and Intel Atom microprocessor and chipset revenue up 15pc to US$415 million, all sequentially.

Gross margin was 57.6pc, higher than the company’s expectation, even though the average selling price (ASP) for microprocessors was slightly down sequentially. Inventories were down US$315 million sequentially.

Spending on R&D and mergers and acquisitions was US$2.75 billion, consistent with the company’s expectation. Restructuring and asset-impairment charges were US$63 million, higher than the company’s expectation.

Net losses

The net loss from equity investments and interest and other was US$47 million, better than Intel expected.

Looking ahead to the fourth quarter, Intel predicts revenue of US$10.1 billion, plus or minus US$400 million, gross-margin percentage of 62pc, plus or minus 3 percentage points, and R&D spending and mergers and acquisitions of around US$2.9 billion.

By John Kennedy

Photo: Intel president and CEO Paul Otellini.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years