In its worst financial performance in six years, Intel last night reported a fall in third-quarter profits of 77 per cent, due to weak PC sales and the general economic slowdown. The giant chip-maker also announced a slump in revenue of 25 per cent to $6.5 billion (7.2 billion).
This was slightly better than analysts' forecasts of $6.15 billion and and in line with the trading statement issued by the firm last month. Sales were also marginally ahead of expectations, indicating that Wall Street had already factored the bad news into Intel's share price, which closed up 58 cents to $24.96 on the Nasdaq composite index.
The firm also announced it had reduced its Irish workforce to 3,150, a decline of 250. Intel had initially sought 170 redundancies at its Leixlip, Co Kildare, operation.
Executive vice-president Mr Andy Bryant said in a conference call at the company's Santa Clara, California headquarters that it was ahead of target in achieving a previously announced 5,000 redundancies worldwide by the end of the year.
Intel also confirmed it intended to restart construction of the Fab24 facility at Leixlip in the first quarter of next year. Work on the project was halted last March as the global outlook for semiconductors dimmed.
A company spokeswoman said it had no plans to cut staff numbers further at the Intel plant and Intel had been sending staff to the US since April to prepare for the opening of the new Fab24 plant. Senior vice-president Mr Paul Otellini said in Santa Clara that chip sales had not been affected by the terrorist attacks on the US on September 11th apart for a brief slowdown in the US. "European retail sales were very strong after the 11th as if people were trying to get on to the internet or whatever," he said. Intel chief executive Mr Craig Barrett said the company had "delivered solid third quarter results in a turbulent environment" and that he expected to see "moderate unit growth in microprocessors and flash memory in the fourth quarter".
Reporting after the close yesterday, Intel said net income before acquisition-related costs fell to $655 million, or 10 cents a share, from $2.89 billion, or 43 US cents, a year ago, which included seven US cents a share in acquisition-related costs.
Sales declined 25 per cent to $6.5 billion from $8.73 billion. Intel stock has declined 20 per cent this year, while that of its main rival Advanced Micro Devices tumbled 23 per cent amid the worst-ever slump in the semiconductor industry.
