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Last Updated: Friday, 3 March 2006, 21:44 GMT
Intel warns of weakened revenues
Computer with Intel chip
Intel's fourth-quarter results disappointed
Chip giant Intel has warned that weaker demand than expected means its first-quarter revenues are likely to fall short of its previous forecasts.

The US firm now expects its revenues for the three months to 31 March to total between $8.7bn (5bn) and $9.1bn.

Previously, it had predicted that the quarter would produce revenues of between $9.1bn and $9.7bn.

Intel's trading warning comes after its fourth-quarter results disappointed Wall Street in January.

Increased competition

Despite the firm then announcing a 25% jump in profits for the three months to 31 December, its shares dipped as investors had been expecting more.

I think the entire market will respond to this negatively because they [Intel] are such an incredibly influential company
Analyst Ray Rund

Then as now, the firm was hit by weaker than expected growth in demand for its processors.

Intel's semiconductors are used in some 90% of the world's computers, but it has recently faced increased competition from rival Advanced Micro Devices (AMD).

Shares in Intel fell 0.73% to close at $20.34 in early Friday trading on the Nasdaq index in New York.

Analyst Ray Rund of Shaker Investments said the decline in Intel's share price would inevitably affect others in the sector.

"They're number one, and I think what Intel is seeing is pretty much Intel specific, but I think the entire market will respond to this negatively because they are such an incredibly influential company," he said.

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