Intel said last night that its third-quarter business was "within previous expectations", allaying fears that the world's largest micro-chip maker would lower its outlook and drag down technology stocks further after another bad day on Wall Street.
In an announcement after the close of trading, the Santa Clara-based company said it expected revenue for the third quarter to be within the previous expectation and slightly below the midpoint of the range provided on July 17th. However, executives said while they believed they had reached bottom they did not know when a recovery would happen.
Intel's microprocessor business continues to follow seasonal patterns while the flash and communications businesses remain in line with the company's expectations at the beginning of the quarter," the company said.
Shares in Intel, which is in a vicious price war with AMD, rose slightly in after-hours trading following the announcement, in which it said expenses are expected to be between $2.0 billion (€2.24 billion) and $2.1 billion, lower than the previous expectation of between $2.1 billion and $2.2 billion.
However the loss from equity investments and interest and other is expected to be a net loss of $90 million, lower than the previous expectation of zero, due to lower than expected realized gains from the sale of equities. Intel also expects to reduce its third-quarter tax provision by $100 million.
Intel shares rose on the news which was better than some had expected. But the markets had a volatile day, with worries over economic data and a profit warning adding to the pressure.
In the latest bad news from the telecommunications sector, Motorola said it had eliminated 2,000 more jobs, bringing its job cuts to more than 20 percent of its work force since last December.
The company said softer-than-expected demand for telecommunications equipment has resulted in sales being flat in the third quarter rather than up 5 per cent as anticipated.
A Motorola spokeswoman said that jobs cuts in Motorola Ireland were not anticipated.
Underpinning the pessimistic mood was a report from the National Association of Purchasing Management, which said US economic activity outside the manufacturing sector may deteriorate further in coming months as new orders tumble against a background of broad economic weakness.
The August NAPM index of non-manufacturing activity fell to a new four-year low of 45.5 in August from 48.9 in July. A reading below 50 indicates contraction in the sector.
American consumers, worried about job security and declining stock market portfolios, turned to discount chains in August, leaving most department stores and designer stores with reduced revenues.
