Intel Bumps Up Q3 Revenue Forecast


By Kevin McLaughlin, ChannelWeb

7:12 PM EDT Fri. Aug. 28, 2009
Stronger-than-expected demand for microprocessors and chipsets has prompted Intel to raise its third quarter revenue forecast from $8.5 billion, plus or minus $400 million, to $9.0 billion, plus or minus $200 million.

On Friday, Intel also said it expects third quarter gross margin percentage to be in the upper half of its previously forecast range of 53 percent, plus or minus two percentage points. The third quarter is historically stronger for Intel than the second quarter as a result of back-to-school PC purchases.

On July 14, in its second quarter earnings call, Santa Clara, Calif.-based Intel forecast revenue of between $8.1 billion to $8.9 billion, and Wall Street analysts polled by Thomson Reuters had expected revenue of $8.55 billion. Intel will report its third-quarter financial results on Oct. 13.

It's the latest twist in an up-and-down year for Intel, which in Q1 reported a 26 percent year-over-year revenue decline. In Q2 Intel posted a loss of $398 million -- its first quarterly loss in more than two decades. However, that was largely the result of the record $1.45 billion antitrust fine the European Union levied against Intel in May.

In the Q2 call, Intel noted that its results easily exceeded Wall Street analysts' forecasts, although Intel CEO Paul Otellini steered away from the sort of macroeconomic commentary he offered in Intel's Q1 call, which included statements such as, "The worst is behind us" and an assertion that PC sales had "bottomed out."

Does Intel's move to bump up its forecast represent a break in the recessionary cumulonimbus bank hanging over the IT industry? Dell Computer CEO Michael Dell seems to think that Intel's Nehalem processor and the looming arrival of Windows 7 could drive PC sales. In Dell's second quarter earnings call Thursday, Dell suggested that 2010 could be a big year for hardware sales.

If Dell's prediction holds true, Otellini's Q1 prediction of a thaw in the PC market could actually start to pan out.

 
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