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Last Updated: Friday, 3 December, 2004, 06:16 GMT
Intel sunny about holiday sales
Worker at an Intel plant in Costa Rica holds a chip
Intel chips go into four out five PCs built around the world
Strong demand and reduced stockpiles foretell a dramatic rise in chip giant Intel's sales outlook, the firm says.

The company, whose chips power most of the world's PCs, said it expected sales of $9.3bn-9.5bn (4.8bn-4.9bn) for the three months ending 25 December.

The forecast is far above both Intel's previous prediction of $8.6bn-9.2bn, and its all-time record of $8.74bn.

After poor news such as a high-profile chip cancellation, the figures prompted a surge in demand for Intel shares.

In "grey market" trading after Wall Street closed, Intel rose 7%.

Margins

The company's stock has fallen 29% since the start of this year, as bigger inventories and more competition from rival AMD have taken their toll.

Worries about whether the holiday season - traditionally the peak time for consumer computer buying - would prove a bust have also weighed on the firm's prospects.

And analysts are still watching 2005, for which the firm made no predictions, for signs that demand for low-end chips will eat into margins and profits.

That said, the chance of a "record quarter and a record year" as chief financial officer Andy Bryant put it prompted an enthusiastic response from some investors.

"I'm ecstatic," said Harry Papp at L Roy Papp and Associates.

"This tells me end-user demand is healthy."

In its most recent quarter to September, Intel made a profit of $1.9bn on sales of $8.5bn


SEE ALSO:
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Intel's new chips target mobiles
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