Intel Corp. share price up, Q3 performance tops estimates

Intel Corp. reported a rise in Q3 earnings and revenue, and gave a forecast for fourth-quarter revenue above analysts expectations, ensuring that its supply chain was well prepared for the holiday season.

The California-based company reported a 12% increase in net income and a 7.9% rise in revenue in the quarter ended September 27. The results exceeded analysts projections and hit a quarterly total record for the companys 46 years on the market. With these numbers investors were set at ease that Intel wont be affected by a slowdown, like other firms in the industry were.

Intel reported that it has delivered more than 100 million chips for the recent quarter, the companys first. Shipments of PC chips for all systems rose 15%, while microprocessors and other notebook associated products increased by 21%.

The report very much differed from results expected by researchers at IDC and Gartner, who analyzed the 5 largest PC makers. Last week Gartner announced a 0.5% global decline in computer sales in the third quarter, while IDC called for a 1.7% drop.

However, Intel counts deliveries made to computer manufacturers, rather than their sales. Still the report surprised some. Bob O’Donnell, an analyst with TECHnalysis Research, said: “I saw those PC numbers and I just said ‘Wow’.”

Intels internet of things division increased its shipments by 14%, year to year, but remained relatively small compared to its PC segment.

Tablet chip sales were 15 million in the last quarter, in sync with CEO Brian Krzanichs promise to hit 40 million this year. This was a big improvement, compared to last year when tablet chip deliveries were nearly non-existent.

For the third quarter Intel announced a net income of $3.32 million, or 66 cents per share, on the back of $14.6 billion in revenue, above forecasts of $14 billion revenue and 65 cents earnings per share.

The chip maker projected for the fourth quarter a revenue in the range of $14.2 billion – $15.2 billion and a gross margin of 64%, plus or minus a couple of percentage points. Thomson Reuters analysts averaged a revenue of $14.18 billion and a margin of 62%.

Intel Corp. gained 2.13% in Tuesdays trading session and closed at $32.14 on the NASDAQ, marking a one-year change of +37.06%, with a day high of $32.67 and a day low of $31.71. Shares were up 0.61% by 8:19 GMT at 25.76 euros in Frankfurt trading on Wednesday. The company is valued at $159.125 billion. According to the Financial Times, the 38 analysts offering 12-month price targets for Intel Corp. have a median target of $35.00, with a high estimate of $50.00 and a low estimate of $17.00. The median estimate represents a 8.90% increase from the last price of $32.14.