Semiconductor giant Intel Corp lowered the midpoint of its first-quarter revenue estimates, saying demand for its microprocessors was at the lower end of seasonal expectations.
The Santa Clara, California-based company said Thursday it now expects sales of between US$8 billion and US$8.2 billion in the first quarter, traditionally one of the weakest times of the year. In January, it predicted revenues would be between US$7.9 billion to US$8.5 billion.
The company does not provide earnings guidance.
Analysts are expecting Intel to post earnings of US$0.27 per share on sales of US$8.28 billion, according to a survey by Thomson First Call. Last year, the company posted first-quarter sales of US$6.75 billion. The first quarter ends March 27.
In recent quarters, Intel has moved up the midpoint of its forecast range during midquarter updates. In the current quarter, the midpoint was lower primarily because of a temporary inventory buildup in Asia-Pacific and Japan, said Andy Bryant, Intel's chief financial officer.
Intel said demand for processors like the Pentium 4 "is consistent with the lower end of normal seasonal patterns and significantly higher than in the same period last year." Intel also noted that its communications chip group was performing within expectations.
Bryant said Intel does not expect corporate spending on technology to increase dramatically.
"No massive rush, just a continued -- few companies at a time -- saying, `We need to spend some money here'" he said.
John Lau, an analyst at Banc of America Securities, last month predicted Intel might move its revenue midpoint lower because of excess notebook inventory in Asia. Intel is a major supplier of notebook chips, including its heavily marketed Centrino technology.
Lau said Thursday he expects the problem to be temporary.
"The notebook inventory is a short-term issue and will be resolved within [the first quarter]," he said. "Intel will post strong growth for the rest of 2004."
In the fourth quarter, Intel earned US$2.17 billion, or US$0.33 a share, on sales of US$8.74 billion.
Intel is currently ramping production of its latest Pentium 4 chip, code-named Prescott. It also is updating its Xeon server processors to support 64-bit memory extensions to compete with Advanced Micro Devices Inc's 64-bit Opteron processors.
Intel released its update after the close of markets. Earlier, Intel shares closed at US$29.65, up US$0.61, in Thursday trading on the NASDAQ.
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