|
Intel issues profit warning
|
 |
March 4, 1998: 5:11 p.m. ET
Sluggish orders to translate into lower first quarter profits, revenues
|
NEW YORK (CNNfn) - Intel Corp. stunned investors Wednesday by warning that surprisingly weak demand in the first quarter will cause net income and revenue to fall below expectations.
The Santa Clara, Calif.-based semiconductor giant said first quarter revenue is estimated to drop approximately 10 percent from the fourth-quarter levels of $6.5 billion. Intel previously estimated revenue to be flat.
The warning sent shock waves throughout the investment community, triggering a sell-off in many major technology shares. Dell Computer Corp. (DELL) tumbled nearly 7 points to 132. Microsoft Corp. (MSFT) dropped 2-1/16 to 80-1/4 and International Business Machines Corp. (IBM) fell 3-1/16 to 99.
In a statement issued after the market had closed Intel said gross margins -- the difference between what Intel sells its products for and manufacturing costs -- are expected to be about 53 percent, plus or minus a few points. Previously Intel told analysts first quarter gross margins would be down only a few points from the fourth quarter's 59 percent.
Analysts had expected Intel to earn 93 cents a share in the first quarter, down from the $1.10 a share recorded in the 1997 first quarter.
Analysts said the revised expectations would likely translate into quarterly earnings of around 70 cents a share for the quarter.
Intel said it also planned to take a one-time charge of $165 million or 9 cents share related to the merger of Chips and Technologies, Inc.
Shares of Intel (INTC) were halted after climbing 1-1/8 on Wednesday to 86-7/16.
|
|
|
|
|
|
Intel
|
Note: Pages will open in a new browser window
External sites are not endorsed by CNNmoney
|
|
|
|
 |
|
