Intel Narrows Its Sales Outlook

The chip-making giant said it expects revenues to be between $6.3 billion and $6.7 billion. Last month, it said sales would range from $6.3 billion to $6.9 billion. The company did not provide earnings estimates.

Analysts expect the Santa Clara-based company to post third-quarter profits of 13 cents per share on sales of $6.9 billion, according to a survey by Thomson First Call.

It's the latest sign the hoped-for recovery in spending during the second half of the year hasn't materialized. Both corporations and consumers, who usually spend more during the quarter on back-to-school PCs, are largely keeping purse strings closed.

Intel did not discuss its outlook on the fourth quarter, which is usually its strongest as consumers buy PCs for the holidays.

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Intel processors--including the flagship Pentium 4 and value offering Celeron--account for more than 80 percent of the PC processor market.

Earlier this month, the company started shipping a 2.8 gigahertz version of its Pentium 4 and cut prices on older models by as much as 52 percent. Rival chip-maker Advanced Micro Devices Inc. had earlier cut prices when it launched a faster version of its flagship Athlon XP.

In July, Intel announced it was cutting 4,000 jobs, or 4.8 percent of its work force, largely by not filling vacant positions. In 2001, the worst year in the semiconductor industry's history, Intel cut more than 5,000 jobs, again mostly through attrition.

Before the midquarter update, shares of Intel set a 52-week low, losing $1, or more than 6.2 percent, to $15.11 in Thursday trading on the Nasdaq Stock Market. After hours, they gained 54 cents in the extended session.

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