Santa Clara (CA) - Intel has been harvesting the results delivered by its Core micro architecture since Q4 2006 and the most recent quarter is yet another sign that the firm has achieved a successful turnaround. For the third quarter of this year, the company reported revenues of $10.1 billion, up 15% from $8.7 billion in Q3 2006, the first quarter that saw a significant impact of Core-based processors.

The reported Q3 revenue is $300 million above the high-end target provided firm’s updated in September.

Net income was $1.9 billion, up 43% from $1.3 billion one year ago. The company said that the growth was mainly driven by mobility and digital enterprise products - covering the firm’s mobile, desktop and server processors. Overall microprocessor shipments set a new record while the company was able to keep the average selling price flat. Intel noted that it has shipped more than two million quad-core processors in Q3.

Financially, Intel was able to improve its gross margin dramatically from 46.9% to 52.4%, which was made possible by higher chip volumes and, according to the company, lower start-up costs for 45 nm processors, due for release on November 12.

However, Intel noted that spending was $2.9 billion instead of the expected $2.6 billion, as a result of higher revenue costs as well as increased research and development costs as engineers moved from 45nm start-up efforts to the development of 32 nm CPUs, which are scheduled for a 2009 introduction.

Intel expects further financial improvement in in Q4 with with estimated revenues of $10.5 and $11.1 billion and a gross margin of more than 57%.