Intel Corporation beat earnings estimates when it announced on Tuesday that it posted a third quarter profit of $1.6 billion on sales of $6.73 billion. Company officials cited strong demand for its PC microprocessors, the Pentium II, Celeron, and Pentium II Xeon. Intel says it is barely meeting the demand for its chips and that the upcoming quarter will see another gain.

"We are pleased with our overall performance in the last quarter," said Intel CEO 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.