Intel, the world's biggest chipmaker, said profit rose 51 per cent on higher sales of personal-computer processors. The revenue forecast for the current quarter missed analysts' estimates.
Fourth-quarter net income increased to $2.27 billion, or 38 cents a share, from $1.5 billion, or 26 cents, a year earlier, Santa Clara, California-based Intel said yesterday.
Sales gained 11 per cent to $10.7 billion. Intel's forecast adds to concern that technology spending and revenue growth will be hurt by an increase in customers' borrowing costs. Analysts including JPMorgan Securities's Christopher Danely said Intel and Advanced Micro Devices may be making more chips than PC makers need.
"We are really anxious whether they can go through the first and second quarters and survive a slowdown in the US economy," Graham Tanaka, president of Tanaka Capital Management in New York, said in an interview on Bloomberg TV. The firm owns Intel shares. First-quarter sales will be between $9.4 billion and $10 billion, Intel said.
Analysts surveyed by Bloomberg estimated sales of $10.1 billion. Intel fell 39 cents, or 1.7 per cent, to $22.69 at 4 pm New York time in Nasdaq Stock Market trading.
The stock, the fourth-best performer on the Dow Jones Industrial Average with a gain of 32 per cent last year, has fallen 15 per cent this year. Following IBM Intel, whose sales are seen as an indicator of overall technology demand, kicked off the earnings season for US technology companies.
Yesterday, International Business Machines Corp, the world's biggest computer-services company, said fourth-quarter profit and sales topped analysts' projections. Analysts had predicted Intel would report fourth-quarter profit of $2.36 billion, or 39 cents a share, according to a Bloomberg survey. Sales were estimated at $10.8 billion.
In October, Intel forecast sales of as much as $11.1 billion.
Intel is benefiting from stumbles by Advanced Micro, which boosted its share of the processor market in 2006. Last year, Advanced Micro delayed new chips because they didn't run fast enough, allowing Intel to take back some sales and slow price cuts. - (Bloomberg)
