Intel, the world's largest chipmaker for personal computers, announced 3,000 cuts on Tuesday as it reported a 36 percent drop in first-quarter profits and a 7 percent decline in revenue.
The company predicted similar results in the current quarter as PC manufacturers continue to reduce their stocks. But it cautiously expected business to pick up again later in 1998.Some industry analysts agreed, saying new chips Intel was introducing Wednesday also should help perk up demand.
"I think some of the new technology Intel is introducing . . . is going to get into the mainstream in the second half of the year," said Linley Gwenap, editor of Micro-processor Report newsletter.
Intel, based in Santa Clara, Calif., earned $1.27 billion, or 72 cents a share on a diluted basis, in the January-March quarter. That was down from $1.98 billion, or $1.10 a share, in the year-ago period.
The lower profits also reflected a charge of about $165 million, or 9 cents a share, to account for Intel's acquisition last year of Chips and Technologies Inc.
Revenues, meanwhile, fell to $6 billion from $6.45 billion.
The financial results exceeded the diminished expectations set by Intel last month. Still, Intel chairman and chief executive officer Andrew S. Grove called the quarter disappointing.