Flash memory sales boost Intel as Q2 profits up 96%

SEMICONDUCTOR maker Intel Corp said yesterday that second-quarter profits rose 96%, meeting Wall Street estimates, due to growth in its communications business led by flash memory.

Quarterly earnings rose 96% to $1.8 billion (€1.5bn), or 27 cents per share, from $896 million (€726m), or 14 cents per share, a year ago.

Analysts had predicted Intel would earn 27 cents per share in the latest quarter, according to Thomson First Call.

Revenue rose 18% to $8.05bn in the quarter ended June 26, from $6.8bn last year.

Intel's second-quarter results included a previously disclosed $62m reversal of previously accrued taxes primarily related to the closing of a state income tax audit, as well as an adjustment to the effective tax rate. These items increased second-quarter earnings-per-share by 1.7 cents. Intel's first-quarter results included a legal settlement charge that reduced earnings per share by 1.7 cents.

On June 3, the company predicted second-quarter revenue would range from $8bn to $8.2bn, an increase from an earlier forecast of $7.6bn to $8.2bn. Intel said it raised its guidance because of stronger-than-expected demand for flash memory chips, used primarily in cell phones.

Intel's products include Pentium and Celeron brand microprocessors, flash memory chips and embedded semiconductors.

On June 25, just before the end of the quarter, Intel said it would have to recall some chip sets because of a manufacturing flaw that could cause computers to crash or fail to boot. Citing the "quiet period" before Intel's earnings, company officials declined to say how many units would be recalled or how it would impact finances.

Intel stock closed Tuesday at $26.14, down 10 cents, on the Nasdaq Stock Market.