MANHASSET, N.Y. Semiconductor supplier Intel Corp. posted third-quarter earnings of $2 billion, or 32 cents per share on sales of $9.96 billion, compared with year-ago third quarter earnings of $1.9 billion, or 30 cents per share on sales of $8.5 billion in the year-ago quarter.
Intel was expected by analysts
to earn 33 cents share on sales of $9.9 billion. In the second quarter, Intel earned 33 cents per share on sales of $9.23 billion.
Earnings reflected the impact of a legal settlement with MicroUnity stemming from a patent dispute. Intel (Santa Clara, Calif.) will pay $300 million to MicroUnity (Santa Clara, Calif.), a software-based broadband solutions provider. Intel recorded a $140 million charge that reduced earnings per share by 2 cents.
Third-quarter results also reflected a $250 million tax increase related to the decision to repatriate foreign-earned income under the American Jobs Creation Act (Jobs Act).
"In the third quarter, we achieved all-time records in company revenue and unit shipments across all of our major product lines," said Paul Otellini, Intel president and CEO, in a statement. "Execution remained solid as we launched our new dual-core server platform ahead of schedule and began shipping microprocessors built on our industry-leading 65-nm process technology.
Intel reported gross margin of 59.7 percent, and said unit sales of microprocessors, chipsets, flash memory, wireless connectivity, and applications processors improved while motherboard sales declined.
During a conference call with analysts, Intel executives noted that laptop demand remained strong in all geographies and now represents roughly a third of global PC sales. Intel also expects to continue ramping up 65-nm process technology next year, helping to drive up gross margin.
For the fourth quarter, Intel expects sales of $10.2 to $10.8 billion. Projected capital spending for 2005 is unchanged at $5.9 billion, with the company announcing in September plans to expand several 200-mm U.S. fabs
A report by ThinkEquity Partners LLC (New York) said Intel’s fourth-quarter guidance was conservative, noting that the company was forecasting slower than seasonal growth because of strong third-quarter sales. ThinkEquity expects Intel’s sales will top off near the high-end of its guidance.