Updated from 4:37 p.m. EDT
SAN FRANCISCO --
business held up amid the global financial turmoil that marked the close of the third quarter, but the chipmaker warned that the road ahead was getting bumpy.
"As we look to Q4, it is hard to know what impact the financial crisis will have on end customer demand," CEO Paul Otellini said in a statement Tuesday.
The Santa Clara, Calif., chipmaker said sales in the last three months of the year will range between $10.1 billion and $10.9 billion, a range that barely meets the $10.8 billion expected by analysts.
Shares of Intel were up 4.6%, or 73 cents, at $16.66 in extended trading Tuesday.
For the three months ended Sept. 27, Intel earned $2 billion, or 35 cents a share, compared to $1.79 billion, or 30 cents a share, a year earlier.
Intel's EPS, which was helped by a lower-than-expected tax rate, was a penny higher than the average analyst estimate according to Thomson Reuters.
The chipmaker boosted its gross profit margin to 58.9% from 55.4% in the third quarter, thanks to lower costs and a higher portion of microprocessor sales in its revenue.
While the average selling prices of its microprocessors were down sequentially on account of its new low-price Atom chip designed for inexpensive netbook PCs, Intel said it had record unit shipments of microprocessors and chipsets during the quarter.
Third-quartre sales increased a modest 1% year-over-year to $10.2 billion. The average analyst expectation called for revenue of $10.26 billion.
Intel incurred a greater-than-expected charge of $265 million in the third quarter relating to its joint-venture with
producing NOR flash memory chips.
And the company said it will have an additional $250 million of restructuring charges in the current quarter from a separate joint venture, producing NAND flash memory, with
Otellini said business levels have become difficult to predict, but said the company was confident that its products and cash flow would allow it to outpace its peer companies.
Intel projected that its gross margin in the current quarter would be 59%, plus or minus a couple of points -- the midpoint of that range would represent Intel's highest gross margin since the fourth quarter of 2005.