Intel's earnings fail to signal high-tech turnaround

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Intel

Patrick Gelsinger, Intel senior vice president, holds a wafer containing the company's new Xeon 5500 series processors. Although the Santa Clara, Calif., chip maker's earnings fell 55% and revenue dropped 26% in the quarter that ended March 28, both beat Wall Street’s estimates

The chip giant, an industry bellwether, sees first-quarter profit fall 55% and revenue drop 26%. The firm's CEO says the PC market may have hit bottom.

The Intel Corp. semiconductor giant 'of the sales and benefit of first quarter of tumbled down S.A., but the leader of technology said Tuesday which the market of personal computer which it dominates finally stabilized of a freefall which began last year while the consumers closed the zipper to the top their small pockets and were satisfied with the material they had.

Although the chipmaker the 'incomes of S fell 55% and the income dropped 26%, both beat evaluations of Wall Street 'of S.

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We see the signs that the bottom of the market segment of PC was reached, Paul senior officer from Intel that Otellini indicated during a conference call with analysts. I believe that worst is now behind us.

Santa Clara, California, company gained $647 million, or 11 hundreds a share, on $7.1 billion in the income in the quarter which finished on March 28. One year earlier, it gained $1.4 billion, or 25 hundreds, out of $9.7 billion in the sales. The analysts envisaged sales of Juste below $7 billion and net income $157 million, or 3 hundreds a share.

Always, the didn of report/ratio 't envisaged the great reversal that Wall Street had hoped to hear of Intel while it gave a kick to far the advanced technology industry 'the season from incomes of S.

The investors had bet that the growth industry turned a corner, sending to the top of Intel 'shares of S 8% this year compared with a decline of 7% for the standard and the poor 'index of S 500. Currents of company 'of S enclosed to the top of 3 hundreds to $16.01 but decreased more than 5% inside after hours trading after the incomes release.

Which Intel the 'incomes of S [be] stating to us is that the things went from terrible to simply bad David, says Wu, analyst of semiconductor to the total capital of crown. Gens wants to hear when the things will be better. These doesn 't indicate really the answer to us.

The laptop and the desktop machines started to pile up upwards in the fourth quarters as consumers and of the companies deferred to buy them, thus the manufacturers ceased placing as many orders of Intel of the 'pieces of S. the excessive inventory was sold during the first three months of the year, and the company started to see progressive recovery of the request. and a return to one, more normal of seasonal tendencies Otellini indicated.

But Intel informed that it was not very likely to improve its profit margins in the quarter running because it high cost to build its newer factories of piece and the shift towards the computers of the consumer, which are less advantageous than those sold with the companies.

And although the market of PC could have struck the bottom, a re-establishment will be probably slow, the analysts said.

Intel put on a hat on positive hopes for the second quarters, Patrick says Wang, an analyst with the values of Wedbush Morgan. If they had said that they intend to raise the income, the market would have gathered. Instead of that, they said that the income and the margins will be flat, which is not a good manners to begin the season of incomes.

One projects that forwardings of the GCV raise just 0.7% of 2009, according to ISuppli Corp., a company of searchs for technology. The company of El Segundo provides that a stock exchange transaction at a higher price in sales of laptop will compensate for a continuous decline in the number of sold desktop machines.

But the mentality of business-drives out started by the recession means that the manufacturers will have to reduce prices, envisaged firm, translating with a drop of 4% in the total income to $192 billion this year $201 billion 2008.

A field of growth for Intel is the sale of the so-called computers of netbook, which are primarily the light laptops this cost $300 $500. The sales of Intel 'the microprocessors of atom of S, which actuate netbooks, were $219 million in the quarter.

Although it was in bottom of 27% of, of former quarter returned him 'of S they didn 't has, year ago Wu said. When you 'on the subject to the bottom of this much, each small little helps.

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