Intel butts into Barcelona Day with earnings surprise

Intel expects more revenue than it previously thought this quarter, as demand has turned out to be pretty strong across the globe.

The company now expects to record between $9.4 billion and $9.8 billion in revenue for its third quarter, which ends this month. When the company reported second-quarter earnings in July, it expected to do between $9 billion and $9.6 billion in revenue. The ranges are there as hedges--when Intel and other companies provide a range they are generally directing you toward the midpoint of that range.

In 2006, Intel announced it would be doing away with its practice of providing midquarter guidance amid a series of disappointing midquarter announcements. Funny how that changes when you've got good news to report. An Intel representative said the company still doesn't plan to do this every quarter, but it has to issue these reports when expectations differ--good or bad--from the previous guidance to the degree that we're talking about in this case.

The Intel representative declined to comment on what exactly was driving the additional revenue, other than to say that demand has been stronger than expected worldwide. Intel also expects to be more profitable this quarter, with gross margins above 52 percent.

In an amazing coincidence, Intel's release arrived as its bitter rival AMD is getting ready for a global launch party for Barcelona, AMD's first quad-core server processor. Intel's decision to launch quad-core server chips last year based on a simpler design probably has something to do with its revenue surge, as it has been able to pitch quad-core chips against AMD's dual-core chips for 10 months. It might also be a sign that the ongoing price war between the two companies is starting to wind down, although we won't know for sure until next month when both companies report earnings.