The world's largest maker of microprocessors was forced the compete with AMD for market share and has to endured price cuts and layoffs.
Intel, the worlds largest producer of microprocessors, posted its third-quarter profits Oct. 17, and the company reported that its net income declined by 35 percent compared to the same quarter in 2005.
For the third quarter, Intel posted a net income of $1.3 billion, or 22 cents per share, compared to a net income of $2 billion, or 32 cents per share, during the same period last year.
Wall Street had been calling for revenue of 17 cents per share and revenue of $8.62 billion, according to Thomson First Call. During its announcement, Intel, based in Santa Clara, Calif., said it had revenue of $8.74 billion.
Excluding share-based compensation, Intel posted operating income of $1.7 billion, net income of $1.5 billion and earnings per share of 27 cents, the company said.
During the third quarter, Intel has been involved in a pricing battle with its main rival, Advanced Micro Devices, and the companies have been striving to push more new products out into the marketplace.
Click here to read more about the rivalry between Intel and AMD.
On July 27, Intel introduced its new Core 2 Duo
for desktops and notebooks. During that announcement, the company said the new chip would give a 40 percent increase performance, while reducing power consumption by 40 percent, compared to the Pentium D.
Intel has also been forced to cut cost has it lost some market share, according to Mercury Research, and announced Sept. 5 that it would layoff more 10,500 workers.
Click here to read more about Intel and how the layoffs are expected to affect the company.
Still, some analysts seem Intel on the comeback trail.
Joe Osha, a research analyst with Merrill Lynch, wrote in a research report to investors that the quarterly results were in line with Merrill Lynchs expectations, the product lineup was improving and the market share loss should stop.
"On the negative side, share losses in server processors are likely to continue, and manufacturing capacity appears excessive," Osha wrote.
Osha also gave the upper hand to Intel in its battle with AMD.
"The reality is that Intel has highly competitive 65nm products in both the desktop and notebook markets while AMD will only just be getting ready to ship 65nm late this year or early next," Osha wrote.
Intel estimated its fourth quarter revenue would be between $9.1 billion and $9.7 billion. Wall Street has called for revenue of $9.43 billion.
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