SANTA CLARA – Intel Corp. said on Thursday that sales for the third quarter will be at the lower end of a range it set in July as it grapples with a global slowdown in personal computer sales.
In mid-July, Santa Clara, California-based Intel, the world's No. 1 semiconductor maker, forecast a wide range for third-quarter sales of $6.2 billion to $6.8 billion, a decline of as much as 29 percent from the company's 2000 third-quarter sales of $8.73 billion.
Before Thursday's update, the 23 analysts surveyed by Thomson Financial/First Call expected Intel to post earnings of 8 cents to 13 cents a share, with the consensus at 10 cents. The mean sales forecast, based on 11 estimates, was for $6.41 billion.
Intel's revised guidance was within the expectations of most analysts on Wall Street.
Intel also said that its gross margin — revenue left after subtracting product costs expressed as a percentage — would be within the previous expectation of 47 percent, plus or minus a couple of points.
It said expenses will be slightly lower, at $2.0 billion to $2.1 billion, than its earlier forecast of $2.1 billion to $2.2 billion.
In addition to slowing economies around the globe and lackluster personal computer sales, Intel is mired in a fierce price war with rival Advanced Micro Devices Inc. Advanced Micro has gained share against Intel in the market for microprocessors this year, and Intel has pledged to recoup those losses.
Last week, Intel slashed prices by 50 percent on some of its Pentium 4 microprocessors — the same time it introduced its Pentium 4 chip, running at 2 gigahertz. AMD responded with its own price cuts shortly thereafter.
Intel's mid-quarter update follows AMD's warning last week that it expects an operating loss in its third quarter as sales fall 15 percent from the previous three months, even though shipments of its Athlon and Duron processors — the brains of personal computers — were still strong.
Shares of Intel closed down $1.37, or 5 percent, to $26.10 in Nasdaq composite trading. Intel stock has fallen 16 percent this year, while shares of AMD have declined 17 percent, as the benchmark Philadelphia Semiconductor Index has fallen 11 percent.
In after-hours trading, Intel stock moved up to $26.80.