Stronger than expected demand for processors helped Intel top Wall Street's estimates in its fiscal first quarter results.
Revenue rose 13 per cent to $8.02bn while net income, including acquisition related costs, increased to $273bn, or 78 cents a share, compared with $2bn, or 57 cents a year ago. Analysts polled by First Call had pegged earnings per share at 69 cents.
Craig Barrett, Intel's president and chief executive, said: "Demand in the first quarter was stronger than we expected at the beginning of the year and continues to be stronger as we enter the second quarter."
He also said the company is accelerating its developments to keep up with an expected strong second half of the year. This includes ramping up its 0.18 micron manufacturing technology in five facilities, as well as adding a further three sites by the end of 2000.
Excluding the acquisition costs, but including a 17 cents a share tax benefit, Intel's net income was $3.1bn, or 88 cents a share.
Looking ahead, Intel warned that product supply would continue to be tight in the second quarter and that revenue during that period would break even with the first quarter's figure. "The first quarter has been really good," said Linley Gwennap, principal at researcher Linley Group. "The one thing that hurt Intel was not being able to deliver enough Pentium III processors at the high end."
Demand was so strong in the first quarter that the chipmaker was completely sold out of some versions of its Pentium III microprocessors, but according to Gwennap, "these chips typically do not constitute the volume of sales, so the effect was minimised".
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