Intel, the world's largest computer chip maker which has a workforce of over 4,000 here, said first-quarter profits for 2001 dropped 64% from the same quarter last year. The company said it expects sales for the second-quarter to drop 20%.
The Santa Clara, California-based company reported net income of $1.1 billion, or 16 cents a share, compared with $3 billion, or 43 cents a share, during the same quarter last year. Analysts expected Intel to report 15 cents a share on sales of $6.59 billion.
Intel CEO Craig Barrett said in a statement accompanying the report that the company sees both good and bad times ahead.
'Our microprocessor business appears to have stabilized and we expect to see normal seasonal patterns going forward from our current business level,' said Barrett. 'In our communications businesses, we are experiencing continued softness,' he added. 'Looking beyond the current environment, we believe our aggressive investment in new manufacturing technologies and the development of cost-competitive, leading-edge products is the winning strategy.'
Bill Reilly, Head of Public Affairs at Intel Ireland, said the company's plans for the Fab 24 project at Leixlip, the construction of which has been delayed until 2002, is still on track. The company said it was not cutting back on the $2 billion overall investment in the new facility, but was spreading it over a longer period of time. The Fab 24 project is expected to create over 1,000 new jobs by 2004.
In March, the computer chip maker said it would scale back sales projections and slash some 5,000 jobs to reduce expenses.
Intel has been cutting prices on its new Pentium 4 processors as much as 19%, and is expected to increase those cuts to 60% later in the year. The company's computer chip business has been eroded both by a slowing economy and accompanying lackluster computer sales, and also competition from rival AMD.
Intel has seen its share of the chip market erode from an 81% late last year to a little over 77% of the market for the first quarter of 2001, with AMD growing from 17 to 21% during that time.
