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Intel predicts 'double-digit growth' again
Demand for laptops keeps Bryant buoyant...

By Michael Singer

Published: Friday 09 September 2005

Strong demand for laptops could help Intel again see double-digit growth this year, the company said on Thursday during its scheduled mid-quarter update.

The chipmaking giant said it expects its revenue for July, August and September to be between $9.8bn and $10bn. The estimate narrows a revenue forecast Intel issued in July of $9.6bn to $10.2bn.

Intel CFO Andy Bryant said there should be no real surprises in Intel's revenue for the third quarter, which ends on 1 October.

He said: "We have been able to start a few more wafers than we expected this quarter, so my unit costs have been better. Manufacturing came through just as we expected."

The company said it now expects its third-quarter gross margin to be 60 per cent, plus or minus a point, and to be slightly above the midpoint of the range. The previous expectation was 60 per cent, plus or minus a couple of points.

Intel also said it expects its third-quarter tax rate to be affected by additional taxes of approximately $250m, plus or minus $25m, related to a potential repatriation of approximately $6.3bn of accumulated income earned outside the US.

Shares of the company closed up 43 cents on the Nasdaq but dropped 34 cents, or 1.3 per cent, to $26.09 in after-hours trading.

Laptops have become a significant profit centre for Intel. In the first quarter of this year, laptop chips accounted for 30 per cent of Intel's output. That figure is expected to rise to about 33 per cent next year, Intel has said.

In the first quarter, laptop sales in US retail, a small, yet significant sub-segment of the overall PC market, passed sales of desktops for the first time.

Michael Singer writes for CNET News.com