Intel Corp on Wednesday posted a 38 percent fall in quarterly profit and cut its annual revenue forecast, but said it had stopped losing market share to rival Advanced Micro Devices Inc.
Intel's shares were up more than 1 percent in after-hours trading following its first-quarter earnings report, which topped average Wall Street expectations by a penny.
The stock has fallen about 24 percent in the past 12 months on investor concern Intel was losing clients to AMD, and analysts warned of more volatility ahead.
The world's top computer chip maker said first-quarter net income was $1.35 billion, or 23 cents per share, down from $2.18 billion, or 35 cents per share, a year earlier. Earnings beat the 22 cents forecast on average by analysts, according to Reuters Estimates.
Intel, whose processors are found in about 90 percent of personal computers, has been cutting prices to counter the growing challenge from AMD, whose products offer power usage and performance advantages.
Intel on Wednesday said it had stemmed the slide in its market share and gave an optimistic outlook for the second half as it increases sales of new products, including its "Viiv" system for high-end home entertainment and notebook computers using high-powered dual-core processors.
"We held market share in units in the quarter," Chief Financial Officer Andy Bryant told Reuters. "The key positive for the quarter is we made the midpoint of the revised revenue guidance" given by Intel in March,
Santa Clara, California-based Intel in March surprised investors by lowering its first-quarter revenue forecast to $8.7 billion to $9.1 billion, citing weaker-than-expected demand and a decline in market share.
First-quarter revenue came in at $8.94 billion, compared with $9.43 billion a year ago. Analysts on average had forecast $8.87 billion.
Intel also cut its estimate of 2006 gross margin, a measure of profitability, to 53 percent from its January forecast of 57 percent. First-quarter gross margin was 55.1 percent compared with a January forecast of about 59 percent.
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