With profit up, Intel rates its chances in a downturn

INTEL SAID its profit for the third quarter was up 12 per cent on last year's hefty figures.

Net income of $2 billion had chief executive Paul Otellini crowing about how the chip maker would weather any downturn the merchant bankers may have saddled us with.

The firm had delivered the best third-quarter revenue in its history, he said.

"This is not a dotcom style downturn, he told hacks assembled at a press conference yesterday, "that was principally people selling computers cheaply on Ebay from companies that melted down," he said.

"Here, emerging markets make a difference, as the cost of computing has come down based on growing income levels. Technology will probably do well from a downturn, because we sell the tools of productivity."

So an uncertain economic outlook in the West will not hit Intel's spending on its 32nm line of chips, he said.

The bulk of the costs of shifting to a new manufacturing process will come in the first half of next year, he said.

Otellini said that the firm is in good shape to weather any financial downturn. It has axed 20,000 workers since 200 and has cash reserves of over $12 billion in what we assume is a pretty safe bank. Or under Craig Barrett's mattress.

For the quarter, firm made $2 billion on revenues of $10.2billion (£5.84 billion) posting an operating income of $3.1billion (£1.77bn).

Demand for Atom processors had outstripped supply in the third quarter Otellini confessed, claiming Intel would be able to meet demand by the end of the year.

Referring to competitor AMD's asset split, Otellini said nothing had changed. "The food chain hasn't changed," he said, "there's just one more person in the chain looking for a profit." µ