Technology bellwether Intel has reported a steep drop in profits and has declined to give detailed quarterly forecasts in its earnings results.
The world's largest maker of microprocessors reported profits for the fourth quarter slumped from $2.27 billion last year to $234 million for the quarter ended December 27th.
Revenue at Intel, which employs some 5,000 people in Ireland, fell to $8.2 billion from $10.7 billion last year.
That trend was in line with two revenue warnings the company issued in the past three months as chip sales as companies and consumers cut back on spending in a recession. Those warnings have touched off alarm bells across the technology sector.
However, shares in the world’s largest maker of microprocessors rose to $13.85 from their close on the Nasdaq of $13.29.
Investors had feared that Intel would slash revenue expectations for the first quarter, but the company said it was not providing an outlook. Instead, Intel said: "for internal purposes, the company is currently planning for revenue in the vicinity of $7 billion".
The company told analysts yesterday it expects its gross margin back up into a "healthy" range by the second half of 2009.
"We have a very strong balance sheet, we have $14 billion in cash and investment, and our business model generates cash even in these weaker legs of the economic cycle," Chief Financial Officer Stacy Smith told Reuters. "That really holds us in good stead as we go into a weaker demand time."
However, some analysts feared Intel's share rally will be short lived with chip sales sliding as PC makers and other technology manufacturers trim inventory and cut back on purchases amid the slowing global economy.
Reuters