Intel Corp.s quarterly earnings came in below Wall Streets already lowered expectations today as the worlds largest PC chipmaker announced it would cut 4,000 jobs, or 5 percent of its work force, in the face of sagging demand for its processors.
After the stock market closed Tuesday, Intel, of Santa Clara, Calif., reported second-quarter net income of $446 million, or 7 cents a share, on revenue of $6.3 billion. While total sales met Wall Streets expectations, earnings per share fell 2 cents per lower than consensus forecasts, according to Thomson Financial/First Call.
Second-quarter net income excluding acquisition-related costs totaled $620 million, down 39 percent sequentially and 27 percent below the same period last year. Earnings excluding acquisition-related costs were 9 cents per share, a drop of 40 percent sequentially and 25 percent below the second quarter of 2001.
These results include the impact of the $106 million charge related to the gradual shut down of Intel Online Services.
Despite the relatively weak showing, Intel Chief Executive Craig Barrett remained optimistic that the chipmaker will see an increase in sales in the coming months.
"Although an overall industry recovery has been slow to materialize, we still expect a modest seasonal increase in demand in the second half," Barrett said in a statement issued with the earnings report. "In this environment, our strategy remains the same: Focus on execution, take prudent cost cutting measures, and invest to further improve our competitive position and long-term growth prospects."
To reduce operating expenses, Intel said it will reduce its work force by about 4,000 employees during the second half of the year, primarily through voluntary separation programs and business divestments.