Microchip producer Intel today reported a doubling of quarterly profit and its highest-ever quarterly revenue as technology spending in North America and Europe showed signs of a revival.
Investors, however, sent shares of Intel down 3 per cent following the close of regular trading, as Wall Street apparently had hoped for stronger sales ahead. The stock, which was the best performer on the Dow Jones Industrial Average last year, remains close to a 52-week high.
Intel's efforts to sell chips into mobile phones and networking equipment have yet to catch on. Despite bringing in $1 billion in sales, Intel's communications business lost $146 million in the quarter.
A recovery in Intel's primary business segment - personal and business computers - more than outweighed that weakness. Intel's microprocessor business reported a $3.73 billion operating profit, 87 per cent higher than the year-ago quarter.
Intel executives attributed the improvement in profitability in part to stronger sales of processors for computer servers, the powerful computers that businesses use to run Web sites and databases. Those chips sell at higher prices and give Intel better profit margins.
Intel, which is the largest buyer of machinery used to produce microchips, said its capital spending plan this year would stay about even with last year. Those investments are intended to give Intel five factories that produce chips on 300-millimeter wafers, which yield more than twice the number of microchips as standard-sized wafers.
Intel stock, which more than doubled last year, fell 20 cents, or less than 1 per cent, to $33.39 on the Nasdaq. The shares fell to $32.45 in after hours trade on Instinet.