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Intel results offer hope to tech sector

City A.M. Reporter
INTEL, 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.