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Intel overcomes 'weak' line-up during Q2

Asia and laptops boom, US and servers bumble

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Intel proved once again that it's more regular than a Metamucil salesman by knocking out a solid second quarter.

Intel watched Q2 revenue jump 15 per cent to $9.2bn - a company record for the period. Net income surged as well to $2bn - a 16 per cent year-over-year increase. As has been the case of late, strong mobile processor sales did much of the hard work for Intel.

"Momentum from the first half appears to be continuing as we enter the third quarter," said ebullient CFO Andy Bryant, during a conference call.

Intel made large gains in Asia during the quarter with revenue jumping 28 per cent year-over-year. European revenue also surged nine per cent, while sales in the US dropped five per cent.

The presence of AMD was felt in the period with Intel's Digital Enterprise Group (DEG) processor revenue falling to $4.60bn from $4.68bn one year earlier. Intel admitted that its server processor line-up was not what it should be. AMD managed to beat Intel to market with a 64-bit x86 processor and now has a dual-core server chip first. The technology lead let AMD secure customers such as HP, IBM and Sun Microsystems, while Dell remains loyal to Mother Intel.

"We had a fairly weak product line in 2004," said CEO Paul Otellini. "I think we have done a good job of holding our business through a difficult competitive climate."

That rare admission of defeat comes as Intel faces an antitrust lawsuit from AMD, alleging that Intel used unfair sales tactics to keep its business.

"Intel competes aggressively and fairly around the world," Otellini said. "This formula has led to Intel's success and will not change."

Intel enjoyed a rise in motherboard and chipset revenue and a major jump in mobile processor revenue. Flash memory sales, however, fell.

Third quarter revenue should come in between $9.6bn and $10.2bn, Intel said. ®

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