Intel last night posted quarterly results and an outlook that were behind Wall Street targets. The news sent its shares down 15% and stoked concerns about a US recession and further stock market sell-offs. Intel employs more than 5,000 people in Ireland.
Intel's CFO Stacy Smith said he was a 'little bit cautious' on the state of the US economy, and the results raised concerns about the impact the economy was already having on the world's largest chipmaker.
Intel microprocessors are the computing engines of about 80% of the world's personal computers and the company is making a big push this year to get more of its chips designed into consumer electronics gizmos such as set-top boxes.
If the after-hours percentage drop in its shares carries through into today's trading, it would be the biggest one-day drop in Intel's stock since October 2002.
Intel said its net income in the Christmas-sales-fuelled fourth quarter rose to $2.27 billion, or 38 cents per share, from $1.50 billion, or 26 cents per share, a year ago. Revenue advanced 10.5% to $10.7 billion from $9.69 billion.
Analysts had expected a profit before once-off items of 40 cents per share, on average, on revenue of $10.8 billion. Intel had previously estimated fourth-quarter revenue of $10.5 billion to $11.1 billion.
For the current quarter, Intel said it expects revenue of $9.4 billion to $10 billion and a gross margin of 56%, plus or minus a couple of points. Analysts had expected first-quarter revenue of $10 billion.
CFO Smith said that demand throughout the fourth quarter was strong, and that Intel saw no sign of a US recession during the quarter. 'We're a little bit cautious based on what we see in the US economy,' he added.
Former US Federal Reserve Chairman Alan Greenspan told the Wall Street Journal yesterday that the US economy was probably in or about to enter a recession.
