Intel Corporation, the world's largest computer chip manufacturer, last night reported flat earnings in the third quarter of 1998, but its performance still beat market expectations by nine cents.

Intel reported net earnings in the July-to-September period of $1.6 billion (£1.05 billion), or 89 cents a share, compared with 88 cents in the same period of 1997.

Market analysts had forecast earnings per share in the third quarter of 80 cents. Second-quarter 1998 net income was $1.2 billion.

Revenue in third-quarter 1998 was $6.7 billion, the highest for any quarter and up 9 percent over $6.2 billion in the same period last year. Sales in second-quarter 1998 were $5.9 billion.

"We are pleased with our overall performance in the last quarter," said Intel chief executive, Mr Craig Barrett.

"We had growth across nearly all of our geographies and product lines, including strong microprocessor sales. In the third quarter, the PC industry recovered from its inventory problems and is benefiting from strong seasonal demand."