More gloom from US tech sector

Intel said its profits for the three months to late June came in at $446m, up from $196m one year earlier.

But sales were little changed on the same period last year at $6.3bn, missing analysts' forecasts of $6.34bn.

The company, one of the few tech firms to have avoided mass lay-offs during the recent downturn, said it planned to cut 4,000 jobs, or about 5% of its workforce.

Also on Tuesday, Apple said profits for the same period fell nearly 50% on the year to $32m, while sales slid to $1.43bn, from $1.48bn a year earlier.

And Motorola, the world's second biggest maker of mobile phones, reported an 11% slump in sales to $6.7bn, and a threefold increase in losses to $2.3bn after one-off costs.

Shares slump

The figures were in line with the companies' own forecasts, but Intel and Apple's results came as a disappointment to investors.

Apple tumbled $1.16 to $16.70 in after-hours trade, while Intel shares were marked 16 cents lower to $18.20, extending a 4% decline earlier in the day.

But Motorola - which edged into the black after one-off costs were stripped out - bucked the downward trend, climbing to $14.62 from $14.53 at the close.

Motorola's one-off costs included a hefty restructuring charge stemming from a revamp aimed at cutting costs by 20%.

Computer sales down

Apple and Intel's latest results come amid heavy selling pressure on Wall Street as investors continue to fret over the reliability of corporate financial statements in the wake of the Enron and Worldcom scandals.

Many investors had been hoping that better-than-expected results from the two technology sector bellwethers would help to lift the stock market out of its downward spiral.

Both companies have been hit hard by falling sales of personal computers during the past year.

A range of revamped Apple personal computers have won plaudits for their cutting-edge design, but analysts have questioned the company's decision to put up prices on some models.

Intel chief executive Craig Barrett further disappointed investors with a cautious forecast for the months ahead.

"Although an overall industry recovery has been slow to materialize, we still expect a modest seasonal increase in demand in the second half," he said.

The company's chief financial officer Andy Bryant told the Reuters news agency that Intel is "still waiting for the economic recovery to hit our sector."