Intel profits down 38% as AMD eats into market share

THE world’s biggest chip maker Intel has said first-quarter profit sank 38%, the biggest decline in more than four years, as the company lost market share to Advanced Micro Devices Inc (AMD).

Net income fell to $1.35 billion (€1.09bn), or 23 cents (€0.19) a share, from $2.18bn (€1.76bn), or 35 cents (€0.28), a year earlier, California-based Intel said yesterday.

Sales dropped 5.2% to $8.94bn (€7.22bn).

The report marked the first revenue decline in 12 periods and the forecast for this quarter trailed analysts’ estimates.

Doug Freedman, an analyst at American Technology Research said: “I still have my concerns that the company is going to run into some problems in the back half of the year.”

He rates Intel shares ‘hold’ and suggests buying Advanced Micro.

Intel missed its profit forecast in the fourth quarter, and a month ago reduced its estimates for the first period.

The shares, the worst performers on the Dow Jones Industrial Average this year, rose 17 cents (€0.14) to $19.56 (€15.80) at 4pm New York time in Nasdaq Stock Market composite trading. They are down 22% in 2006.

Twenty-three analysts recommended buying shares, 26 suggested holding them and three told clients to sell.