Otellini: Intel Channel Sales Up, More Growth Expected

Otellini told analysts he believes the Santa Clara, Calif.-based company actually gained about 3 percent of market share during the third quarter--"a four-year high"--during a quarter marked by lower-than-expected profits.

"Intel continues to execute well with new products," Otellini said. "We are increasing our competitive position and achieving market share growth in many product areas."

Otellini noted that Intel recently rolled out a 2GHz Celeron processor in its lower-priced space and plans to roll out its Gallatin multiprocessor-based chip for servers in the fourth quarter.

However, perhaps the brightest spot of performance was in the channel, Otellini said.

"Our worldwide distribution channel's sales-out tied record unit levels," he said. "We expect channel growth to continue, and we are expanding our sales, marketing and branding initiatives in this channel."

Overall, Intel reported third-quarter sales of $6.5 billion, slightly up from the second quarter and flat with the same quarter a year earlier. Its profit of 11 cents per share, excluding acquisition costs, was 2 cents per share lower than the average of Wall Street estimates.

Despite strengths in the channel, Intel said its back-to-school season was softer than expected. Intel CFO Andy Bryant said the company now expected annual sales in 2002 to be flat with 2001. He said he expected modest growth in the fourth quarter.