San Francisco, Sept. 6 (Reuters): Intel Corp. on Thursday tightened its revenue forecast for the third quarter, pushing it slightly below the midpoint of the $ 6.3 billion to $ 6.9 billion range it gave in July, sending its shares and those of other technology firms higher in after-hours trade.
The revised guidance puts the world’s largest chipmaker’s revenue at slightly less than $ 6.6 billion, the mid-point of the range, and it means revenue could be largely in line with analysts’ current revenue expectations. Intel’s new revenue range is $ 6.3 billion to $ 6.7 billion.
Analysts expect the Santa Clara, California-based company to post a profit of 13 cents a share, within a range of 11 cents to 14 cents, on revenue of $ 6.60 billion in the third quarter, according to tracking firm Thomson First Call. Analysts had, since Tuesday, issued research notes saying they believed Intel would drop its revenue forecast to the low end of the range, which the company did not do.
“We may see a bit of a relief rally tomorrow because the announcement avoided some of the more negative expectations,” said Dan Scovel, an analyst at Needham & Co., who expected revenue of $ 6.6 billion. He said he does not own Intel stock.
“I feel very good about the range we’ve projected here materialising in the quarter,” said Paul Otellini, Intel’s president and chief operating officer, on a conference call to discuss the update. Business so far is “not outside of the boundaries of what we've seen in the last five or six years”.
Intel’s mid-quarter update comes as the company hosts next week in San Jose, California, its semi-annual Intel Developer Forum, where it is expected to introduce faster processors for server computers and discuss innovations in semiconductor design and manufacturing that it hopes will keep it in front of the industry in the years ahead.
Intel shares rose in after-hours trading, partially recovering the loss marked in Nasdaq trade. The stock rose to $ 15.72 on the Island system, up from $ 15.11 at the close, but still down 2 per cent from Wednesday. Still, the shares are hovering near a 5-1/2-year low. Tech heavyweights such as Cisco rose to $ 12.85 from $ 12.77 at the close, while Dell Computer Corp. climbed to $ 25.65 from $ 25.20 at the close.
Shipments of flash memory chips, widely used in cellular phones, is within expectations, and demand for communications chips remains soft, Intel said.