Duncan Martell
SAN FRANCISCO: Intel Corp. and its longtime rival, Advanced Micro Devices
Inc., on Thursday both boosted their sales forecasts for the fourth quarter,
suggesting that holiday sales of personal computers may not be quite as grim as
many had feared.
Intel, Santa Clara, California, indicated it now sees fourth-quarter sales at
the high end of its previously given forecasted range of $6.2 billion to $6.8
billion, and may exceed that. AMD expects sales to rise 10 percent or a bit more
from the third quarter's $765.9 million. Last month, the company forecast sales
to be little changed to up slightly.
Analysts and investors have raised expectations since last week, when chief
financial officer Andy Bryant said at an investor conference in Arizona that he
was increasingly confident in its quarterly sales. Intel now expects
fourth-quarter sales of $6.7 billion to $6.9 billion.
"In fact revenue may slightly exceed our previous expectations,"
Bryant said on a Thursday conference call to discuss the update. "Business
appears to have returned to seasonal patterns."
Typically, fourth-quarter sales are higher than in the third, paced by
holiday sales. The company also said that supplies for its Pentium 4 chips are
tight and it can't get enough chips to customers who want them, which could be
benefiting Sunnyvale, California-based AMD.
However, the sales increase in the fourth quarter from the third is typically
higher. In Intel's case, its revised guidance suggests a rise of two per cent to
five per cent. Historically, that increase has been 10 per cent or more.
Shares rise in after-hours trade
Analysts forecast Intel's profit at 10 cents a share, with a range of 8 cents to
12 cents, according to Thomson Financial/First Call. Sales were pegged at $6.59
billion.
Shares of Intel fell 45 cents to $34.16 before the announcement, after the
close of regular U.S. trading. Its stock has jumped 25 percent in the last month
amid a rally in chip stocks. In after-hours trading, Intel climbed to $34.83 and
AMD stock's price rose to $17.20, after rising 1 cent to $16.25. AMD shares are
up 22 percent in the last month.
Intel has been moving as quickly and as aggressively as possible to make only
the Pentium 4 chip and phase out the less expensive Pentium III chip by the end
of the year. Robertson Stephens analyst Eric Rothdeutsch estimates that Intel
gets an average $210 per Pentium 4 chip, compared with an estimated $140 for the
Pentium III.
Intel and other semiconductor makers have suffered a bruising year of falling
sales and profits as the $200 billion industry has been mired in its worst-ever
slump amid slowing economies and weak demand.
With a 78 per cent share of the market for microprocessors, the primary
computing engines of personal computers, Intel relies on processors, chipsets
and motherboards for about 80 per cent of its sales.
AMD, for its part, unveiled its Athlon XP processor on Oct. 9, and said
demand has been strong, adding that it expects to displace the previous record
of 7.8 million processors shipped set last quarter.
AMD also said that it expects its operating loss to be less in the fourth
quarter than the third period's $135.4 million. Analysts had expected AMD to
report a loss of 27 cents a share on sales of $786 million, according to First
Call.
(C) Reuters Limited.