Intel meets Q1 forecasts; future still foggy

Intel meets Q1 forecasts; future still foggy

Intel reported first-quarter earnings on Tuesday that matched analysts' predictions but saw net income decline from a year earlier thanks partly to continued weak spending on IT products in both Europe and the US.

Excluding acquisition-related costs, the chipmaker reported net income of $US1.0 billion for the three months to March 31, down 7 per cent from a year earlier. Earnings for the period, also excluding acquisition-related costs, came in at $0.15 per share, down 6 per cent year-over-year, Intel said in a statement.

The earnings figure matched the consensus estimate of analysts polled by Thomson Financial/First Call.

Revenue was $6.78 billion, up slightly from $6.68 billion in the same period last year. Analysts had been expecting revenue of $6.79 billion on average, Thomson Financial said.

While demand in emerging markets remains solid, established markets such as the US and Europe continue to be affected by weak IT spending, Craig Barrett, Intel's CEO, said in the statement. Aggressive investments in research and development and manufacturing helped sustain Intel's profits in a "generally soft environment", he said.

The Santa Clara, California, chipmaker announced on Monday that it had settled one of two patent infringement lawsuits brought against it by Intergraph. That settlement, which required Intel to pay Intergraph $300 million, reduced earnings per share in the first quarter by $0.01, Intel said.

Second-quarter revenue is likely to fall between $6.4 billion and $7.0 billion, the company said. Reflecting the wide range of that estimate, Intel said financial predictions remain "particularly difficult" to make in the uncertain climate.

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