Intel Corp reported its third-quarter numbers amid fears that the chipmaker would see its profits hurt by the explosion in sub- $1,000 PCs at a time when it is mounting its efforts to make the more expensive Pentium II the new industry standard, as well as increase shipments of MMX Pentiums. Net income rose a solid 20% to $1.57bn, or $0.88 per share, which fell just short of First Call’s consensus of $0.91. Revenue also rose 20% to $6.2bn, in line with projections made by the company back in July (CI No 3,204). Speculation had been widespread in recent weeks that Intel’s gross margin would suffer due to a product mix that dipped a little too much toward the low end. Gross margin stood at 58%, up from 57% a year ago, but down from Q2. In addition to product mix, margins suffered from weak shipments of flash memory units. The company says that microprocessor shipments reached record highs in the quarter and says that more than half of shipments coming from processors with MMX technology. Nine-month net rose 60% to $5.2bn on revenue up 29% $18.56bn. Earnings per share rose 57% to $2.89 for the nine months. Looking ahead to the fourth quarter, Intel expects revenue to increase slightly over Q3 and gross margin to be flat to slightly up. It says that long term gross margin percentage will remain at around 50%. Intel’s balance sheet shows cash and short term investments of $8.96bn.
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