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Demand drives Intel to record quarter

|Includes:Intel Corporation (INTC)
Boosted by strong demand from corporate customers for its advanced microprocessor offerings, semiconductor giant and Dow component Intel (Nasdaq: INTC) today reported record second-quarter earnings of 51 cents per shares, or $2.89 billion, compared to a loss of 7 cents per share, or $398 million, in the same quarter a year ago. Record revenues of $10.77 billion increased 34% compared to sales of $8.02 billion in the same period last year.
The results handily beat consensus estimates of 43 cents per share and $10.25 billion in revenues. Intel President and CEO Paul Otellini labeled the performance “the best quarter in the company’s 42-year history” as gross margins of 67% and operating income of $4 billion also set records. Otellini said PC and server demand is expected to increase.
The company also guided third-quarter revenues higher, saying they expect a range of $11.2 billion to $12 billion. Intel also lifted estimates for gross margins for the third quarter and fiscal 2010.
Shares of the company gained 2% Tuesday to $21.01 ahead of the report and jumped more than 7% in after-hours trading.
It was the company’s third straight year-over-year quarterly revenue gain as it continues to dig out of the recession bottom of $7.15 billion in revenues reported in the first quarter of 2009. It was the company’s fourth straight profitable quarter, a period that also seen earnings rise each quarter. The company’s trailing 12-month earnings rose to $1.67 per share, giving the stock a price-to-earnings ratio of about 12.6 based on Tuesday’s close. Its annual dividend of 63 cents offers a yield of 3.1%.
Intel stock has been a laggard. It remains well below its all-time high of $147.50 set in July 2002 and hasn’t traded north of $30 since early 2004. It closed Tuesday 13% below its 52-week high of 24.20.
Intel is the world’s largest provider of semiconductor chips and platforms for computing and communications systems and devices. Its primary component-level products include microprocessors, chipsets, and flash memory used in personal computers, servers and other products.

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Stocks: INTC