(Associated Press via NewsEdge) Intel reported a 35% decline in third-quarter profits and a 12% decline in revenues, but the chip maker beat Wall Street's tepid expectations and shipped record numbers of microprocessors for mobile devices and computer servers.
Net income for the three months ended September 30 was $1.3 billion, compared with $2 billion in the same period last year.
Revenue fell to $8.74 billion from $9.96 billion.
Analysts had been expecting profits of $1.01 billion on sales of $8.62 billion, according to a survey by Thomson Financial.
In the third quarter, Intel began shipping the world's first 'quad-core' processor chips. Chips are the powerful brains that allow a computer to function, and having four computing cores delivers better performance than the previous lines of chips, with only one or two cores.
The shipments are months ahead of those expected from Intel's nimble rival, Advanced Micro Devices, which has been dramatically gaining market share that Intel once had nearly to itself.
Intel CFO Andy Bryant acknowledged that the company's financial performance bottomed out in the past two quarters, but expressed confidence that performance would improve in the fourth quarter and throughout 2007.
He said revenue in the current quarter would be between $9.1 billion and $9.7 billion, in line with analysts' expectations averaging $9.46 billion.
'We lost market share and were under price pressure,' Bryant said in a phone interview with The Associated Press after the earnings were released. 'We still have to live with tough year-over-year comparisons "&brkbar; but we think the worst is behind us.'
Last month, Intel announced the elimination of 10,500 jobs, about 10% of its workforce, through layoffs, attrition and the sale of underperforming business groups as part of a massive restructuring. The cuts were expected to save the company $3 billion per year by 2008.
AMD, which is boosting capacity at its chip-making factories, is expected to launch a price war next year in an effort to gain market share, while hurting profit margins at both companies.
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