Intel will exceed previous Q4 revenue expectations

Intel is planning for a happy holiday season this month, as it expected to exceed its previous revenue guidance and has made progress in reducing its inventory, according to the company.

Fourth-quarter revenue was now expected to fall between $US9.3 billion and $US9.5 billion, Intel said. When it reported third-quarter earnings in October, the company expected to record between $US8.6 billion and $US9.2 billion in revenue.

The midpoint of the new range, $US9.4 billion, would represent an 8 per cent increase from fourth-quarter 2003 revenue of $US8.74 billion, which was a company record at the time. The fourth quarter is usually Intel's best quarter of the year, driven by consumer purchases of PCs for the holiday shopping season.

Worldwide demand for Intel's desktop, notebook, and server processors had been strong in this fourth quarter, the company said.

Inventory management has been a problem at Intel this year after the company overproduced chips in hopes of stronger growth in the second half of the year.

Intel also saw a higher percentage of working chips emerge from its new 90-nanometre wafers than it expected, leading to a decision to slow down production of new silicon wafers in the second half of the year.

Those efforts were paying off, as net inventory should decrease by several hundred million dollars in the fourth quarter, Intel said.

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