Other chip-equipment makers' shares fell. Lam Research Corp dropped US$0.23 to US$21.14, and KLA-Tencor declined US$0.57 to US$49.39. Teradyne Inc fell US$0.76 to US$26.08, and Novellus Systems Inc declined US$0.90 to US$40. Intel shares have fallen 30 percent this year and trade at 31 times next year's estimated per-share earnings. Intel's second-quarter gross margin, the percentage of sales left after paying production costs, will be 49 percent, missing the 53 percent target given in April, the company said.
Lehman Brothers Inc analyst Dan Niles reduced his second-quarter profit target to US$0.11 a share from 15 cents and his 2002 estimate to US$0.60 from US$0.70. Banc of America's Doug Lee cut his 2002 forecast to US$0.55 from US$0.68.
STMicroelectronics NV, Europe's largest chipmaker, today said it's sticking with an estimate for 10 percent sales growth in the second quarter compared with the first. Munich-based Infineon Technologies AG said it stands by an April forecast in which it said demand was starting to recover.
Both stocks fell more than 6 percent. Japanese chip-equipment maker Tokyo Electron Ltd dropped 4.3 percent. Taiwan Semiconductor Manufacturing Co and United Microelectronics Corp, which make chips for other companies, fell more than 6 percent.
"If Intel -- being the bellwether -- is having problems, then who else is having problems?" said Alan Loewenstein, co-manager of the John Hancock Technology Fund, which manages US$754 million and owns Intel shares.
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