Intel's quarterly profit fell 40 per cent amid an industry price war, and the top chipmaker's stock fell 4 per cent last night after it forecast gross margins would not improve this year.
Intel, which supplies processors for about three-quarters of the world's personal computers, also said it expected sales for the first quarter of between $8.7 billion and $9.3 billion, compared to the average Wall Street forecast of $8.9 billion. Intel employs approximately 5,500 people in Ireland.
But it said gross margin would be about 49 per cent in the first quarter and 50 per cent for 2007. Fourth-quarter gross margin was 49.6 per cent, up from 49.1 per cent in the third quarter but down from 61.8 per cent a year earlier.
Intel shares fell to $21.40 in extended trading on concerns about the margin outlook, which had improved in the past two quarters.
Chief Financial Officer Andy Bryant said fourth-quarter margins were helped by higher sales and new products, though some of that was offset by unused capacity at some factories and its flash memory chip operations.
Intel's fourth-quarter net profit, including special items, was $1.5 billion, or 26 cents per share, compared to $2.45 billion, or 40 cents per share, a year earlier. Excluding restructuring charges and gains from the sale of assets, the profit was 25 cents per share, in line with the average Wall Street forecast for adjusted earnings.
Revenue was $9.7 billion, down 5 per cent from a year ago, though it was ahead of the average forecast of $9.4 billion.