Revenue will be $14.7 billion, plus or minus $500 million, Intel said. That compares with $14.2bn, the average of analysts’ projections compiled by Bloomberg. Gross margin, the percentage of sales left after deducting production costs, will be about 65%.
Intel said sales of notebook computers are driving earnings, with unit growth at a percentage in the double digits. The forecast defied analysts’ predictions that consumers are turning away from laptops in favour of tablets and smartphones. Intel also may have benefited from a failure by rival Advanced Micro Devices to supply enough of its own new chips.
The company benefited from strong microprocessor shipments and double digital growth in laptop unit shipments, chief executive Paul Otellini said in a statement.
The company also boosted its stock-buyback program by $10bn. Intel shares rose as high as $24.60 after the report. Earlier, the stock increased 0.5% to $23.40 at the close in New York. The shares have gained 11% this year.
AMD, Intel’s main challenger in PC chips, last month said that glitches at a plant in Germany were hurting production of its processors.
Third-quarter net income rose to $3.47bn, or 65 cents a share, from $2.96bn, or 52 cents, a year earlier, the Santa Clara, California-based company said. Analysts on average had estimated profit of 61c. Sales increased 28% to a record $14.2bn, compared with an average prediction of $13.9bn.
Gross margin, the only measure of profitability that Intel forecasts, was 63.4% in the third quarter. The company’s division that makes PC chips reported a 22% increase in sales to $9.4bn. Revenue in its Data Center Group, which supplies server chips, grew 15% to $2.5bn.