Intel news helps push markets on

Semiconductor giant Intel helped keep European markets on the front foot today after announcing a sharp improvement in quarterly sales and profits.

US-based Intel described its performance as “excellent” and said it had been due in part to its policy of continuing to invest during the economic slowdown.

The update gave investors in London further encouragement to return to the market as the Footsie set a new 14-month high with a 50 points rise.

The gains were matched across Europe where top flight shares lifted by more than 1% in morning trading.

Alex Scott, analyst at Seven Investment Management, said: “Markets are feeling cheerful about life at the moment and have been seizing on any good news to drive stocks higher.”

Sales for Intel’s third quarter grew 20% on a year earlier to $7.8bn (€6.7bn) while net income more than doubled to $1.7bn (€1.46bn).

Intel chief executive Craig Barrett said the figures showed the company, which employs around 900 people in Swindon, Wiltshire, had positioned itself well to benefit from the economic upturn.

He added: “Our resolve to invest aggressively during the downturn is paying off with double-digit revenue growth and a doubling of profit compared to a year ago.”

Intel said economic uncertainty continued to dog its forecasts, although it pencilled in revenues for the current quarter of between $8.1bn (€6.96bn) and $8.7bn (€7.48bn).

The update came too late to influence trading on Wall Street, although in light of other third quarter figures US analysts are now looking for the Dow Jones Industrial Average to break 10,000 for the first time in almost 18 months.

However, Mr Scott pointed out that the recent rise in markets meant much of Intel’s performance had already been priced into shares.

He added: “Intel are still making cautious noises about the health of the sector. With a large proportion of its improvement coming from cost-cutting, we need to ask if this performance is repeatable next year.”