Intel surprised the market on Tuesday evening with an announcement that revenue for its fourth quarter would be better than expected, beating the third quarter by up to 10 per cent.
The prediction, made after US stock markets closed, was more bullish than in its third quarter statement in October, when it expected only a slight revenue increase. It made an almost identical announcement midway through its third quarter, raising earlier expectations for that period.
"Stronger than anticipated demand for PC products across all market segments and in all geographies is expected to cause revenue to exceed Intel?s expectations for the fourth quarter of 1998," the company said in a statement.
This announcement would mean earnings for the fourth quarter, closing at the end of December, rising to between $7.1 billion and $7.3 billion. This compares to the fourth quarter of 1997 where revenue was $6.5 billion, returning profit of $1.7 billion.
Before this announcement analysts had expected Intel to earn $0.95 a share for the fourth quarter compared to $0.98 in the same period last year. The company said gross margin would be up by around two points on the previous quarter?s 53 per cent figure. Expenses would also be up by between eight and 10 per cent however.
It also noted that headcount reduction was making progress, although it expected to be a few hundred short of its target of 3,000 less employees by the end of the year.
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