Intel Profit Up 25%

Chipmaker Intel reported a 25% increase in quarterly profit today, helped by strong sales of microprocessors used in notebook computers, and gave a revenue forecast that topped expectations. However, its second-quarter gross margin disappointed some analysts as the company said higher demand for cheaper laptops led to a lower-than-expected average microprocessor selling price. "The concern on the Street was that demand may be falling off the cliff. We've seen that in the handset market. So at least as Intel's results and outlook goes, we're not seeing similar weakness in the PC market," said CRT Capital Group analyst Ashok Kumar.

Intel's second-quarter net income rose to $1.60 billion, or 28 cents per share, from $1.28 billion, or 22 cents per share, a year ago. That beat the average Wall Street estimate for a profit of 26 cents per share, according to Reuters Estimates. Revenue rose to $9.47 billion from $8.68 billion, whereas analysts had expected $9.32 billion on average.

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I hope they've realized that by lowering their prices, they've made their products more affordable, and as a result of that increased demand, which increases sales. Selling more chips at a lower price = greater profits than selling a few chips at a higher price. They don't make as much on each chip sold, but they make more in the long term.

(jasondefaoite said @ #1)
Wonder how much of the increase is due to the falling US dollar

Wouldn't that be hurting profits? Intel still has to buy the materials to make these things in foreign markets... and they buy them in US dollars...

Yup, if you were solely looking at the US market.

However if a significant percentage of their sales are outside of the US, they end up making more money when the profits are reported back as USD in the Q earnings.