BBC Home
Explore the BBC
BBC News
Launch consoleBBC NEWS CHANNEL
Last Updated: Tuesday, 16 January 2007, 22:18 GMT
Price cuts continue to hurt Intel
Intel chip
Intel and rival AMD are fighting hard for market share
Intel, the world's largest chipmaker, has seen its fourth quarter profits fall 39% as its price cuts continue to hurt its bottom line.

Reporting its results for the last three months of 2006, Intel's net profit fell to $1.5bn (765m) from $2.45bn a year earlier.

Meanwhile, its revenues fell 5% from the same time last year to $9.7bn.

Intel and its main rival, Advanced Micro Devices, have been involved in a price war over the past year.

Beats market expectations

Despite Intel's sharp dip in profits, the fall was expected, and the firm's results came in slightly ahead of market expectations.

The competitive pressures with AMD were more severe than we had thought
Analyst Joanne Feeney

Wall Street analysts had expected a fourth quarter profit of $1.44bn.

Intel now expects sales of between $8.7bn and $9.3bn in the first quarter.

A price war between Intel and Advanced Micro Devices' (AMD's) has proved to be bruising for both firms.

Over the past year, Intel has seen its shares fall in value by almost 15%, while AMD's have lost nearly half of their value.

Analyst Joanne Feeney of FTN Midwest Securities said Intel's latest results were indicative.

"It indicates to us that the competitive pressures with AMD were more severe than we had thought and that Intel continues to struggle to regain its market share," she said.

How Intel is trying to reverse its results

Intel backs Vietnam in $1bn deal
10 Nov 06 |  Business
Competition erodes Intel profits
18 Oct 06 |  Business
Intel launches marketing makeover
30 Dec 05 |  Business
Intel eyes entertainment market
06 Jan 06 |  Technology
Intel PCs target the digital home
24 Aug 05 |  Technology
IBM pays $1.3bn for security firm
23 Aug 06 |  Business

The BBC is not responsible for the content of external internet sites

Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit


Americas Africa Europe Middle East South Asia Asia Pacific