Intel earnings up, but miss analysts' mark

Intel shipped more of its less lucrative slower-speed processors than it expected to last quarter - and consequently made a smaller profit than expected.

Intel has reported third-quarter earnings of $US1.9 billion, or 55 cents per share, excluding costs related to acquisitions, missing analyst's expectations by two cents per share.

Revenues for the quarter increased 9% from a year ago to $6.7 billion, helped by strong shipments microprocessors, chipsets and flash memory products, Intel said. Despite selling record numbers of these products, Intel shipped more of its slower-speed processors -- which yield smaller profits -- than it expected to, officials said.

The income figure of $1.9 billion is 21% higher than Intel reported in the third quarter of 1998, while earnings of 55 cents are up 22% over the same period. Nevertheless, Intel missed the expectation of financial analysts, who expected the company to show a profit of 57 cents per share, according to First Call.

Intel acquired four companies during the quarter: Dialogic, Level One Communications, Softcom Microsystems and NetBoost. These acquisitions were valued at more than $3 billion in total, Intel said.

Including costs related to those acquisitions, net income was $1.5 billion, down 6% from a year ago. Earnings per share were 42 cents, down 5% from 44 cents in the third quarter of 1998.

Craig Barrett, Intel's president and chief executive officer, said in a statement that the company is looking forward to "seasonally strong business" in the fourth quarter.

"We will aggressively ramp our high performance family of Pentium III microprocessors on 0.18 micron process technology," Barrett said. "At the same time, we are accelerating our new business activities in networking, communications products and online services, as illustrated by the number of acquisitions made in the third quarter."

The company has scheduled a press and analyst event in San Jose, California, on October 25 where it plans to roll out new Pentium III and Pentium III Xeon processors based on the advanced 0.18 micron process.

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