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January 15, 2010

Intel Excites Wall Street with 65 Percent Gain in Fourth Quarter

According to recent reports from Intel, the company has produced sales and profits that have topped what analysts were expecting. A CNBC report pointed to better pricing and demand for server chips as driving these results. The company’s shares added to Thursday’s gains in extended trading.

The chip maker reported a gross profit margin in the fourth quarter of a record 65 percent. In addition to this news, Intel (News - Alert) has also presented a forecast well ahead of expectations. The current quarter should range between 59 percent and 63 percent.

Intel is considered the world’s largest semiconductor maker and is also a component of the Dow Jones Industrial average. The company reported fourth quarter earnings of $2.3 billion, or 40 centers a share. During the same period last year, Intel earned $234 million or four cents a share.

The company released forecasts for the current quarter at $9.7 billion with a margin of error of $400 million. Thomas Reuters (News - Alert) polled analysts who report on average they expect current quarter revenue to come in at $9.3 billion.

'They did a nice job on the topline which exceeded our expectations. The gross margins were better than we had even expected,'' Broadpoint AmTech analyst Doug Freedman, in the CNBC report, said. 'Looking forward, we're encouraged by the low capital spending and the projection that gross margin would continue to operate within a very tight range.”

Once Intel reported its earnings, technology stocks enjoyed much excitement and rallied over the potential the market may hold in this new year and new decade. In fact, Advanced Micro, one chip rival in particular, gained 1.6 percent, and Microsoft (News - Alert) climbed nearly one percent after hours.

In other Intel news, the company recently announced that personal computing” is expanding beyond the PC to nearly every kind of electronic device. And as computing goes, so is communications, fixed and wireless, but particularly wireless. This statement was made by Intel Corporation President and CEO Paul Otellini.
 
Earlier today, TMCNet reported that Intel announced at the Consumer Electronics Show in Las Vegas that the company is opening a software store, dubbed the AppUp Center.

To try and build excitement for its new venture, Intel has added a beta tag (News - Alert) on its website to ensure everyone is familiar with the hip software lingo. Intel isn’t just running with the crowd, however, as the company has a strategy. The AppUp Center will cater applications specifically for netbooks.



Susan J. Campbell is a contributing editor for TMCnet and has also written for eastbiz.com. To read more of Susan’s articles, please visit her columnist page.

Edited by Amy Tierney
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