Intel earns up 59 pct; PC pain less than expected

Intel Corp.'s third-quarter results showed Wall Street something that many anxious investors were itching to see: a sign that economic edginess hasn't ruined consumers' appetite for new PCs as much as originally feared going into the critical holiday shopping season.

Intel said Tuesday that its net income leaped 59 percent and sales rose 18 percent, both topping analysts' expectations.

Those expectations had been tamped down in August when Intel cut its guidance, blaming weak consumer PC demand that has rippled across the computer industry. Thus, the jump that the technology-industry bellwether reported Tuesday would have been higher if the economy hadn't dampened back-to-school spending, one of the electronics world's most important shopping seasons.

Still, investors sent Intel shares up slightly in extended trading.

Intel said after the market closed Tuesday that it earned $2.96 billion, or 52 cents per share, compared with $1.86 billion, or 33 cents per share, a year ago. Analysts expected 50 cents per share, according to a Thomson Reuters survey.

Revenue rose 18 percent to $11.10 billion, from $9.39 billion. Analysts expected $10.99 billion.

Job-market jitters have caused shoppers to hang on to more of their money, turning back-to-school into a bust for many PC makers and their suppliers. The focus now is on the industry's other make-or-break moment: the holiday shopping season.

Many analysts are predicting this winter will be healthier than the fall. Intel's fourth-quarter forecast seems to support that. Intel is predicting revenue of $11.0 billion to $11.8 billion in the fourth quarter. Analysts were expecting $11.3 billion.

CEO Paul Otellini said Intel continues to see "healthy worldwide demand for computing products of all types." As the world's biggest maker of microprocessors, the "brains" of PCs, Intel is a proxy for the overall PC market. The company's chief financial officer, Stacy Smith, said in an interview that Intel expects the consumer PC market to continue growing in the fourth quarter, but at a slower pace than in the first half of the year.