Intel narrows Q4 revenue guidance within prior range
- 12 December, 2005 12:35
Intel has narrowed its expectations for fourth-quarter revenue last week, saying it is going through the normal seasonal uptick in business during the second half of the year.
Revenue should fall between $US10.4 billion and $US10.6 billion during the quarter, Intel's chief financial officer, Andy Bryant, said.
The midpoint of this range, $US10.5 billion, is the same as for the range that Bryant provided in October following Intel's third-quarter results. At that time, Intel expected to bring in between $US10.2 billion and $US10.8 billion in the final quarter of the year.
Strong growth in emerging markets such as China and India, as well as the global adoption of notebook PCs over desktops, helped keep Intel's business expectations within the prescribed range, Bryant said. However, some Wall Street analysts had been hoping for a more optimistic outlook from Bryant. The average estimate of analysts polled by Thomson First Call was $10.6 billion in revenue during the quarter.
The fourth quarter of the calendar year is generally the best operating period for chip and PC companies, given the high volume of holiday shopping during November and December. Early reports of this year's holiday retail PC buying showed an improvement over last year, according to Current Analysis, and analysts had hoped Intel would receive an extra kick from that activity.
Intel was still having problems meeting demand for low-end desktop chipsets as a result of manufacturing capacity constraints, Bryant said. This problem is expected to go away over the next year as Intel rolls out its new 65-nanometer processing technology, which allows the company to make smaller transistors than the current 90nm generation of chip-making technology. This also frees up capacity on older manufacturing technologies for chipsets, which aren't as complicated as microprocessors, such as the Pentium D or Pentium M.
The manufacturing tightness has not affected processor shipments, Bryant said.
Bryant declined to provide specific details on chip pricing during the quarter but said Intel was facing strong competition for design wins, especially within the server market, against rival Advanced Micro Devices (AMD).
"Server orders are tough to win, and it's hand-to-hand combat in some places," he said.
Likewise, Intel did not have data on its market share gains or losses during the quarter at this early date, Bryant said. But Intel's business performed as expected, and if AMD's business performed as that company expected, AMD would be likely to gain a little bit of share.
Intel's midpoint revenue projection of $US10.5 billion would give it about $US39 billion in revenue for the full year, a 14-15 per cent improvement over last year, Bryant said.