Intel's Q2 income plunges 76 percent

Intel Corp. on Tuesday reported second-quarter net income that was down 76 percent from a year ago, as the company continues to grapple with slowing PC sales and pricing pressure in the market for PC microprocessors.

Net income for the quarter, which ended June 30, was $854 million, down from $3.5 billion a year ago. That translated into earnings of $0.12 per share, down from $0.50 in the second quarter of 2000. Analysts polled by Thomson Financial/First Call had expected the company to report earnings of $0.10 per share.

Revenue was $6.3 billion, down 24 percent from the year-earlier quarter, Intel said in a statement.

The income figures exclude acquisition-related costs. Including those charges, net income was $196 million, down 94 percent from a year ago. Earnings per share were $0.03, down from $0.45 in the second quarter of 2000.

"Intel's second quarter results met our overall expectations as our microprocessor business performed better than expected, with sequential growth in units, while our communications and flash businesses remained soft," Craig Barrett, Intel's president and chief executive officer, said in a prepared statement.

During a mid-quarter financial update last month, Intel said it expected revenue to be slightly below the midpoint of the $6.2 billion to $6.7 billion range that it estimated at the close of its first quarter. The chip maker also said that expenses would be slightly below the midpoint of its forecast, which was between $2.2 billion and $2.3 billion.

Intel's main rival, Advanced Micro Devices Inc., last week also reported a sharp drop in profits for its second quarter. Earnings per share came in at $0.05, down from $0.61 per share in the year earlier.

Ahead of the news, Intel's shares (INTC) on the New York Stock Exchange ended the regular trading day at $29.90, up 2.6 percent from the previous day.

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Douglas F. Gray

PC World
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