Tech tonic
Q3 earnings season is upon us and it's one of the most eagerly anticipated ones for a while as everyone looks for evidence that the apparent recovery from the global recession has some substance.
Well, if the tech sector is anything to go by, it does. Late last Tuesday Intel was the first biggie to report, and it boasted revenue of $9.4 billion, up 15 percent on the previous quarter. This translated to profits of $1.9 billion - well ahead of expectations.
"Intel's strong third-quarter results underscore that computing is essential to people's lives, proving the importance of technology innovation in leading an economic recovery," said Paul Otellini, Intel president and CEO. "This momentum in the current economic climate, plus our product leadership, gives us confidence about our business prospects going forward.
Rival chip maker AMD reported yesterday and actually managed to register a profit for the first time in about three years. This claim needs to be qualified, however, since the profitability applies only to what AMD calls its "product company". This is the part of AMD left after it spun-off its manufacturing operations to form GlobalFoundries, of which it still owns a third.
The product company managed a profit of $2 million but, when you include AMD's stake in GlobalFoundries, AMD lost $128 million. That still represents a significant improvement on the loss of $330 million in Q2, however.
"Strong demand for our product and platform offerings combined with disciplined execution resulted in AMD Product Company achieving profitability in the third quarter," said Dirk Meyer, AMD president and CEO.
"Growth in microprocessor and graphics unit shipments drove an 18 percent sequential revenue increase, while improved factory utilization rates, higher microprocessor average selling price and an increase in 45nm product shipments resulted in a gross margin improvement from the prior quarter."
