Intel Roars Past Estimates - TheStreet

Intel Roars Past Estimates

Intel reported a record gross margin in the fourth quarter and surpassed earnings estimates by 10 cents a share.
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Updated from Thursday, Jan. 14

SANTA CLARA, Calif.--(

TheStreet

--

Intel

(INTC) - Get Report

blew past analysts'

estimates

in its

fourth-quarter results

, as the chipmaker reported a record gross margin.

Shares rose to $21.86 in premarket trading Friday after closing Thursday at $21.48.

The Silicon Valley heavyweight posted revenue of $10.6 billion after market close, a 28% hike on the prior year's quarter, and well above Wall Street's estimate of $10.17 billion. Intel earned 40 cents a share on net income of $2.3 billion, up from $234 million and 4 cents a share in the prior year's quarter.

Excluding items, most notably Intel's recent

$1.25 billion

settlement with rival

AMD

(AMD) - Get Report

, the tech bellwether earned 55 cents a share, up from 15 cents in the same period last year. Analysts surveyed by Thomson Reuters had predicted earnings of 30 cents a share.

Intel also enjoyed a gross margin of 65% during the fourth quarter, an increase of 12 points year-over-year.

The company's results will provide a boost to the

broader tech sector

at a time when the U.S. economy is emerging from recession. Intel CEO Paul Otellini also attributed the numbers to his company's recent

push

toward

new products

.

"Intel's strong 2009 results reflect our investment in industry-leading manufacturing and product innovation," said Paul Otellini, Intel's CEO, in a statement. "Our ability to weather this business cycle demonstrates that microprocessors are indispensable in our modern world. Looking forward, we plan to deliver the benefits of computing to an expanding set of products, markets and customers."

For fiscal 2009, Intel posted revenue of $35.1 billion, down 7% compared to the prior year, but just above Wall Street's estimate of $34.73 billion.

Investors responded positively to Intel's results.

Speaking during a conference call after market close, Otellini added that demand for the latest generation of Intel processors, both PC and server, is particularly strong. The executive explained that Intel enjoyed an "uplift" in the chips' Average Selling Price (ASP) in the fourth quarter.

For the first quarter, Intel expects revenue between $9.3 billion and $10.1 billion. Analysts surveyed by Thomson Reuters have predicted sales around $9.35 billion.

-- Reported by James Rogers in New York