Intel raises quarterly earnings forecast

Vendor revises estimate by several million dollars

Citing surprisingly high demand for its processors, Intel has upgraded its third-quarter revenue forecast to a range of US$9.4 billion (NZ$13.5 billion) to US$9.8 billion, from the company’s previous estimate of US$9 billion-US$9.6 billion.

Both ranges are far above Intel’s results in the third quarter of 2006, when the company collected US$8.7 billion, a 12% drop from the same quarter the previous year. Intel’s sagging performance in 2006 led to a restructuring plan including thousands of layoffs and the sale of several divisions.

The company has posted much stronger results in 2007, despite a lingering price war with AMD. In July, Intel beat Wall Street estimates with second-quarter revenue of US$8.7 billion, with profit up 44% over the same period of last year.

Intel says its new forecast is based on projected demand throughout its business units, including notebook and desktop chips as well as server processors.

“We’re seeing strength in revenue across the board,” says Intel spokesman Tom Beermann. The company will give more detailed results when it reports its third-quarter earnings on October 16.

Intel has agreed to sell certain assets of its modular communications platforms business, which makes telecommunications boards, to RadiSys for US$31.75 million. The parts of the division being sold to RadiSys make ATCA computing and packet processing blades, ATCA chassis, AMC modules and cPCI blades and chassis.

The deal with RadiSys did not contribute to Intel’s revised revenue forecast today, Beermann says. Intel expects “a significant number” of employees to accept new job offers and move to RadiSys, but has not estimated the number. They will include workers in the engineering, product testing/validation, operations and marketing departments. The deal is expected to close later this month.

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