Intel, the first of the large semiconductor firms to weigh in with earnings this season, handily beat analysts' expectations in the fourth quarter of 1999.
On Thursday, the world's largest chipmaker reported profits of US$2.4 billion, or 69 cents a share, in the last three months of the year, fueled by seasonally strong demand for microprocessors, chipsets, motherboards, and memory products.
Analysts had predicted the company would earn about 63 cents, according to a consensus estimate from Zacks Investment Service. Revenue for the quarter was US$8.2 billion, up 8 percent from the comparable period in 1998.
The results showed a marked improvement over the third quarter, when Intel (INTC) missed profit expectations by about 2 cents and suffered a huge hit to its stock price as a result. Shares of the chipmaker have since recovered, closing Thursday at $91.25, not far from its yearlong high.
Intel president and CEO Craig Barrett set a bullish tone for 2000, saying he expected the company's core microprocessor business to grow with the expected midyear rollout of its speedier Itanium processor. He also said the company would focus revenues from telecommunications applications.
"This year we expect to grow revenues in our networking, communication, and wireless businesses by 50 percent or more," Barrett said.
Still, the company warned that revenue for the first quarter of 2000 would probably be slightly lower than the final quarter of 1999, citing "seasonal factors."
Intel's earnings serve as an indicator for the rest of the chip-making sector. Rival Advanced Micro Devices is set to report its earnings on Wednesday.
