A spike in the number of microprocessors shipped helped Intel record an increase in its third-quarter revenue and income, the company said Tuesday.
Intel reported third-quarter revenue of $10.1 billion, a 15 per cent increase year-over-year, beating Thomson Financial analyst estimates of $9.617 billion. The company also recorded net income of $1.9 billion, a 43 per cent increase year-over-year. The company recorded $0.31 in earnings per share, matching analyst estimates.
The strong quarter is a sign that Intel's restructuring efforts are succeeding, said Paul Otellini, president and CEO of Intel, in a conference call. The company saw better operational efficiency by cutting costs and reducing the headcount by 12 per cent from last year's total.
This not an end of the strategy, but part of larger recovery strategy, said Andy Bryant, Intel's newly minted chief administrative officer. The company is in line to record $2 billion in savings and operational efficiency in 2007, Bryant said.
The company's headcount currently stands at 88,000 and is expected to fall to 86,000 by the end of the year, he said.
The results were helped by a healthy global demand for microprocessors and chipsets, which strengthened as the quarter progressed, Otellini said. The number of Intel chipsets shipped went up with mobility and vPro, a hardware and software platform to manage business PCs, Otellini said.
"Notebooks as a generic product type is igniting in markets around the world," Otellini said, adding that Santa Rosa and Centrino were getting wide acceptance as mobile platforms.
Intel shipped more than two million quad-core processors during the quarter, the company said.
Though the company's Flash Memory Group had a year-over-year increase in net revenue, it recorded an operating loss of $142 million.
A number of big announcements came during the quarter, which ended 29 September. At the Intel Developer Forum in September, the company announced it will ramp up performance and energy efficiency in its microprocessors by using a 32-nanometre process technology starting in 2009, with the Nehalem processors.
It also announced the next generation of vPro processor technology, during the quarter.
The company also estimated revenue for the fourth quarter to be between $10.5 billion and $11.1 billion.
Intel's stock was trading at $26.75 in after-hours trading late Tuesday, up 5 per cent on its financial results.
In related news, Andy Bryant is stepping down as Intel's chief financial officer to be replaced by Stacy Smith, formerly Intel's assistant CFO. Bryant is not leaving the company, however. He's being promoted to the newly created role of chief administrative officer, where he will focus on a "broader set of tasks" including the supervision of Smith, Intel said in a statement. Intel characterized the change as "part of the company’s long-term succession planning process."
Bryant joined Intel in 1981 as controller for the Commercial Memory Systems Operation and became the CFO in 1994. He was promoted to chief financial and enterprise services officer in 1999.
Smith managed the company's financial functions over the past 18 months as it was restructuring. Smith has also served as Intel's chief information officer and as the general manager of Intel's Europe, Middle East and Africa (EMEA) region.