Intel earnings fall 29 per cent, challengers edge closer

Intel earnings fall 29 per cent, challengers edge closer

Falling just shy of analysts' expectations, Intel last week reported second-quarter earnings of $US1.2 billion, down 29 per cent from $US1.6 billion in the year-ago quarter.

Revenue for the three-month period, ended June 27, was $US5.9 billion, more or less flat with revenue of $US6 billion a year ago, Intel said.

The below-par results come on the heels of a lacklustre first-quarter performance, when Intel's profits plunged 36 per cent from the previous year and the chip maker announced plans to lay off 3000 employees worldwide.

Intel's share of the microprocessor market - which analysts estimated to be around 85 per cent - declined slightly in the second quarter, according to Paul Otellini, executive vice president and general manager, Intel Architecture Business Group.

Most of the competition Intel faces is from vendors of low-end microprocessors, Otinelli said, implying that Intel lost some share to Advanced Micro Devices and Cyrix, which compete with Intel at that end of the market.

Intel is on track to ship a version of its Xeon processor for use in four-way servers by the end of the month while sales of Celeron comprised five per cent of the microprocessors Intel shipped in the quarter, Otellini said.

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