Intel reports record Q3 revenue

Next U.S. tech industry report: Google due on Thursday

Intel reported record third-quarter results on Tuesday, posting revenue of $10.2 billion and net income of $2 billion. Intel's revenue was up 1% and net income up 12% compared with the same quarter in 2007.

"Intel delivered the best third-quarter revenue in its history," said Paul Otellini, Intel president and CEO in a statement. "We are solidly profitable, with operating income of over $3 billion, reflecting strong across-the-board execution and best-of-class products."

Intel officials conceded that they don't know what impact the current financial crisis will have on customer demand going forward. They said consumers and businesses may defer IT purchases because of tighter credit, negative financial news and lagging consumer confidence.

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Intel reported record third-quarter results on Tuesday, posting revenue of $10.2 billion and net income of $2 billion. Intel's revenue was up 1% and net income up 12% compared with the same quarter in 2007.

"Intel delivered the best third-quarter revenue in its history," said Paul Otellini, Intel president and CEO in a statement. "We are solidly profitable, with operating income of over $3 billion, reflecting strong across-the-board execution and best-of-class products."

Intel officials conceded that they don't know what impact the current financial crisis will have on customer demand going forward. They said consumers and businesses may defer IT purchases because of tighter credit, negative financial news and lagging consumer confidence.

Because of the uncertainty in global economic conditions, Intel said it would publish a mid-quarter business update on Dec. 4. This information should give the U.S. tech industry a better indication of how the global economic slowdown is affecting product demand during the fourth quarter.

"We are confident that our product portfolio, strong cash flow, commitment to deploying new technology and market momentum will allow us to outpace peer companies at a time when business levels are difficult to predict," Otellini said.

Intel's announcement comes on the heels of a strong performance by IBM, which pre-announced its quarterly earnings last week amid the deepening economic gloom. IBM's revenues were up 5% to $25.3 billion and its net income was up 20% to $2.8 billion.

Last week, IBM executives said they still expected to meet their year-end targets, which include full-year earnings to be up 22% over 2007.

"Our results demonstrate that the combination of a steady base of recurring revenue and profits, investments for growth in emerging markets, a range of products and services that deliver value to clients, and a strong and flexible financial foundation give IBM a competitive edge in good times and tough times," said Samuel Palmisano, IBM chairman, president and CEO, in a statement. "We remain confident in our full-year outlook."

The solid performances by IBM and Intel set the stage for a string of U.S. tech industry results that will be announced over the next two weeks. Google will release its third quarter earnings on Thursday, while AT&T, Apple and Microsoft will issue results next week.

At issue is whether the U.S. tech industry can continue to outperform other sectors during the fourth quarter of this year.

As recently as August, most U.S. tech firms were reporting growth in sales and profitability. Of the 20 largest U.S. tech vendors, 16 had a strong second quarter, including revenues that were up from the previous year. The four companies that were down -- Sprint/Nextel, Motorola, Sun and Qwest -- have been down for several quarters, primarily because of internal restructuring or product transitions rather than the overall market slowdown.

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