Intel stands by sales forecasts

The world's biggest computer chip maker, Intel, is standing by its sales forecast for the third quarter of 2001.

But the company said the figures would be at the lower end of the range it predicted in July.

Intel shares jumped initially on the news, in after hours trading, but fell back as investors digested the implications.

The figures, which were released after the closing bell on the US markets, came after a day of gloom on the world's markets.

Market jitters

The Dow Jones Industrial Average lost 192 points while the tech-heavy Nasdaq also suffered heavy losses.

A profit warning from US tech giant Motorola sent jitters through the markets.

The company said its third quarter sales would be 'flat' after earlier saying they would be up 5%. It announced it will be cutting 2,000 jobs in response to the slowdown in its key markets.

Meanwhile, Intel is attempting to cope with a dramatic slowdown in the market for personal computers.

In July, it forecast third quarter sales of between $6.2bn and $6.8bn.

This represented a decline of as much as 29% from the company's 2000 third quarter sales.

Intel's revised guidance was well within the expectations of most analysts on Wall Street.

The company also said that its gross margins would be within the previous expectation of about 47%.

Last week, Intel slashed prices by 50% on some of its Pentium 4 microprocessors - at the same time introducing a faster version of its Pentium 4 chip.

The chip maker is locked in a fierce price war with rival Advanced Micro Devices, which responded to the Intel cuts with its own price cuts.