San Francisco - Intel, the world's dominant producer of the microprocessors that run computers, reported record third quarter revenue of 10.2 billion dollars Tuesday.

But the positive earnings were tempered by a fourth-quarter outlook that included a tepid prognosis for the all important holiday season.

The Silicon Valley icon, which conducts 80 per cent of its business internationally, said net income climbed 12 per cent to 2.01 billion dollars, or 35 cents a share, from 1.79 billion dollars, or 30 cents, a year earlier.

The company said that fourth-quarter sales will be 10.1 billion to 10.9 billion dollars, a range that was below the expectations of most analysts.

"As we look to Q4, it is hard to know what impact the financial crisis will have on end customer demand," Intel's chief executive officer, Paul Otellini, said in a statement. "We are confident that our product portfolio, strong cash flow, commitment to deploying new technology and market momentum will allow us to outpace peer companies at a time when business levels are difficult to predict."