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Intel saw profits rise 52 per cent for the third quarter, (compared with Q3, 1999) sneaking past Wall Street's reduced expectations.

The Californian chip giant recorded net income before acquisition-related costs of $2.9 billion, on sales of $8.73 billion. This compared to $1.9 billion and $7.33 billion the previous year.

Analysts had been bracing themselves for poorer figures following Intel's warning on September 21 that revenue would be less than expected for the quarter. Its share price took a hammering yesterday, plummeting 11.6 per cent.

Andy Bryant, senior VP and CFO, said in a conference call the figures were "less than we'd hoped for," due to the expected growth from Europe not materialising.

All markets outside Europe saw record sales for the quarter.

The chip master has had a rough ride of it lately - what with delays in shipping the P4 and PIII recalls. To make matters worse, rival AMD today released its new 1.2GHz Athlon and 800MHz Duron.

It said it expected Q4 sales to increase four to eight per cent on Q3, with gross margin for the next quarter anticipated at 63 per cent - down one per cent on Q3. This was due to Intel changing more fabs to making 0.18 micron chips.

"We achieved record revenue with 19 per cent growth in the third quarter. It was a challenging quarter primarily because PC demand in Europe was not as strong as we expected entering the period," said Craig Barrett, Intel president and CEO.

"Looking ahead, we anticipate record revenue in the fourth quarter, with growth across most of our product lines."

"We are especially pleased with the rapid growth in our server business, our record flash business, and our networking silicon business which surpassed our expectations in the third quarter."

Intel's share price rose $1.38 to $37.56 in after hours trading. ®

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