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Wednesday, 18 April, 2001, 08:17 GMT 09:17 UK
Intel profits down 64%
The world's biggest computer chip maker Intel has reported a 64% drop in profits for the first quarter of 2001.


In March we saw a return to the time when customers started ordering new product again

Andy Bryant, Intel chief finance officer
The figures follow two recent profit warnings and were slightly better than analysts' expectations.

They follow a mixed day for technology stocks on Wall Street with a profits warning from internet hardware maker Cisco sending shockwaves through the markets.

Intel, which is seen as a key market barometer, cheered analysts by saying it saw some "good signs toward the end of the quarter."

'Customers ordering again'

The company's chief financial officer Andy Bryant also expressed confidence that the second half of the year would be strong.

"In our microprocessor business, what we saw happening in March gives us a lot more comfort that we'll have a pretty normal second quarter and a seasonally strong second half of the year," Mr Bryant said.

He added: "In March we saw a return to the time when customers started ordering new product again."

Intel said profits fell to $1.1bn for the three months to 31 March this year, from $3.04bn in the same period a year ago.

Sales fell 16% to $6.68bn from $7.99bn.

The figures were well-received on Wall Street, with Intel shares climbing about 9% in after-hours trading.

The stock had earlier closed at $26.06, down $0.24, on New York's Nasdaq before the results announcement.

Texas Instruments

Texas Instruments (TI), The world's biggest chipmaker for mobile phones, also reported first quarter profits ahead of Wall Street expectations on Tuesday.


This is the sharpest deceleration that the semiconductor industry has ever experienced

Texas Instruments
But the company said it still planned to cut 6% of its workforce.

The Dallas-based manufacturer said a continued global economic slump meant it would lay off about 2,500 people starting in the current quarter and take a special charge for the job cuts.

TI chief financial officer Bill Aylesworth said: "This is the sharpest deceleration that the semiconductor industry has ever experienced.

"Throughout the first quarter and into April, we continue to see an environment of very weak orders and order cancellations continuing across a breadth of our products.

"It's just not clear enough for us to see at this time when this will change."

'Unclear'

The company posted a net income of $230m, or 13 cents per share, compared with earnings of $421m, in the same quarter last year.

Mr Aylesworth said it was unclear when demand would pick up again and forecast another decline of about 20% in second quarter sales compared to the first quarter.

TI shares climbed about 9% in after-hours trading, as investors reacted positively to the figures.

Earlier, Cisco said it is cutting 8,500 jobs and says its sales are likely to fall 30% in the current three month period as the slowdown continues.

Dutch firm Philips Electronics, Europe's largest consumer electronics firm, also sent shockwaves through world markets by reporting an 82% fall in pre-tax profits and saying it plans 7,000 job cuts.

 WATCH/LISTEN
 ON THIS STORY
John Woodget, Director Intel Northern/Central Europe
"There's pressure that says we should slow down"


Analysis
See also:

06 Apr 01 | Business
09 Mar 01 | Business
08 Mar 01 | Business
27 Feb 01 | Business
02 Jan 01 | Business
11 Dec 00 | Science/Nature
Internet links:


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