In recent months the forecasts for chip makers has been poor, with companies deciding not to update computer hardware until after the current economic turmoil is overcome. However it seems that Intel have somehow managed to resist the worse of the forecasts and are showing signs of a stronger than expected quarter. Intel say that so far 4th quarter sales have risen, with the retail sector driving sales with a higher demand for personal home computers.
Shares in Intel still fell 94 cents today, or 5.9 percent, to $14.99 at 4 p.m. New York time in Nasdaq Stock Market trading. Broader U.S. markets declined after retail sales fell the most in three years and a gauge of New York manufacturing dropped to a record low, increasing concern over the depth of the economic slump.
Revenue from laptop processors, which sell for more than desktop chips, jumped 20 percent last quarter. Third-quarter profit was also higher than expected because the company was able to run its plants more efficiently, Chief Financial Officer Stacy Smith said yesterday in an interview.
Technology companies often make most of their sales in the fourth quarter during the run up to the Christmas season, and also as businesses spend the year’s remaining equipment budgets. Accounting for that seasonal effect, the Intel forecast is actually worse than normal, thus the drop in share price today.
It seems that the credit crunch is affecting manufacturers of computer chips on both sides of the Atlantic.
