Following layoffs and executive shuffles, Intel reported a third quarter profit Tuesday of $1.3 billion, beating analysts' estimates, but still falling far short of its results last year.

The company reported revenue of $8.7 billion, thanks in large part to the sale of six million of its new Core Microarchitecture chips for notebook PCs and servers. That generated earnings of $0.22 per share, stronger than the prediction of $0.18 per share earnings on revenue of $8.62 billion, according to analysts polled by Thomson Financial.

The numbers were down 35 per cent compared to Intel's profit in the third quarter of 2005, and down 12 per cent compared to past revenue. In the same quarter last year, Intel earned $0.32 per share on revenue of $9.96 billion.

Intel CEO Paul Otellini admitted in April that the company would miss its annual earnings target as it lost market share to rival AMD while worldwide PC growth slowed.

Since then, he laid off 10,500 people in September, shrinking the company by 10 per cent in the culmination of a six-month reorganisation that included an executive shuffle, the dismissal of 1,000 middle managers, and the sale of two business units.

He also accelerated the launch of the Core 2 Duo family of chips, as well as the 'Tulsa' and 'Montecito' Itanium server chips. He also pulled the launch date for the earliest quad-core chips into November instead of the first quarter of 2007.