Intel Posts Gain Despite Weak Demand

MANHASSET, N.Y. — Intel Corp. (Santa Clara, Calif.) reported third-quarter sales of $8.5 billion, up 5 percent sequentially and 8 percent year-over-year in spite of sluggish PC demand and customer inventory adjustments.

Third-quarter net income was $1.9 billion, up 8 percent sequentially and 15 percent year-over-year. Earnings per share were 30 cents, exceeding consensus estimates of Thomson First Call analysts of 27 cents per share.

"Intel delivered growth in both of its major businesses in the third quarter driven by record server and mobile microprocessor shipments and market segment share gains in flash memory," said Intel chief executive Craig R. Barrett, in a statement. "Growth was not as high as we originally anticipated due to inventory adjustments at some of our major customers and lower than expected overall demand for PCs."

Intel expects fourth-quarter sales of $8.6 to $9.2 billion, with gross margins hovering around 56 percent.