US computer chip giant Intel reported record sales and topped analysts' estimates with its third-quarter forecast, downplaying concerns that the personal computer industry's rebound is losing steam.
Sales will be $11.6 billion (€9.1 billion) this quarter, plus or minus $400 million, the California-based company said in a statement last night.
Intel, whose chips run more than 80 per cent of the world's computers, has posted three straight quarters of sales growth, fuelled by rebounding orders for server and laptop chips.
The company is Ireland's largest industrial employer, employing about 4,500 in Ireland at Leixlip, Co Dublin and an operation in Shannon, Co Clare.
Second-quarter net income was $2.89 billion, or 51 cents a share, compared with a loss of $398 million, or 7 cents, a year earlier, when Intel paid a European Union fine. Analysts estimated a profit of 43 cents a share. Revenue increased 34 per cent to $10.8 billion, compared with an average estimate of $10.3 billion.
The company kicks off three weeks of earnings reports by the largest US technology companies, including International Business Machines Corporation, Google and Microsoft.
Intel's dominance of the market for microprocessors, the main component in computers, makes its sales a barometer of industry demand.
Chief executive Paul Otellini expects the PC market to rise as much as 16 per cent annually through 2014, helping maintain Intel's sales gains.
Analysts have taken a different view. They estimate that Intel's revenue growth will slow to 6 per cent next year and 1 per cent in 2012, according to the Bloomberg survey.
Intel also is predicting wider profit margins. Chief financial officer Stacy Smith expects the gross margin, the percentage of sales remaining after deducting production costs, to range between 55 per cent and 65 per cent in coming years. That compares with 50 per cent to 60 per cent over the past decade.
In April, Intel lifted its gross margin target for this year to about 64 per cent, up from 61 per cent. It forecast a margin for the second quarter of 64 per cent.
Bloomberg