Intel results offer hope to tech sector

 
City A.M. Reporter
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L, the chipmaker and tech sector bellwether, yesterday gave an upbeat outlook as it announced third quarter results that shattered expectations, boosting its shares six percent and fueling hopes of a tech sector recovery in the run up to Christmas<br /><br />Analysts said Intel&rsquo;s rosy forecasts for revenue and margins, both of which exceeded expectations, and comments about recovering personal computer demand cheered markets and sparked a tech stock rally that included heavyweights Dell and Hewlett-Packard.<br /><br />Intel chief financial officer Stacy Smith said the technology sector was leading the way out of the economic downturn, as PC demand rebounds.<br /><br />Intel reported a net profit in its third quarter ended 26 September of $1.9bn (&pound;1.2bn), or 33 cents per share, compared with $2.01bn, or 35 cents per share, a year earlier.<br /><br />That exceeded the 28 cent per share profit expected on average by analysts.<br /><br />It forecast fourth-quarter revenue of $10.1bn, plus or minus $400m, and said gross margins in that period should be 62 per cent, plus or minus three percentage points. <br /><br />Analysts on average expected fourth-quarter revenue of $9.5bn and a gross margin of 56.86 per cent.<br /><br />Revenue fell 7.8 per cent in the third quarter to $9.4bn from $10.2bn a year ago, but surpassed the $9.06bn expected by analysts <br /><br />&ldquo;This is a healthy sign for the whole sector. Intel is a bellwether not only in that it reports early, but in that it effects a broad ecosystem,&rdquo; said Roger Kay, analyst at Endpoint Technologies.