Intel To Cut 4,000 Jobs As Earnings Drop - InformationWeek

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Intel To Cut 4,000 Jobs As Earnings Drop

The chipmaker says second-quarter revenue was flat year over year at $6.3 billion and down 7% from the previous quarter.

If skittish investors were looking for signs of hope Tuesday from tech bellwether Intel, they didn't get it. The world's biggest chipmaker said revenue for its second quarter ended June 2 was flat year over year at $6.3 billion and down 7% from the previous quarter. Net income, excluding acquisition costs, fell 27% year over year to $620 million. Earnings on a per-share basis were 9 cents, down 25% from last year. Wall Street analysts surveyed by First Call had expected earnings of 11 cents per share.

The company, which also took a $106 million hit during the period because of its decision to exit the hosting business, says it plans to cut 4,000 jobs in the second half of the year to reduce costs.

Sales of computer chips, chipsets, and motherboards fell during the period, while shipments of flash memory units and Ethernet connectivity products rose, according to Intel. CEO Craig Barrett said in a statement that the company expects a "modest seasonal increase in demand in the second half." Third-quarter revenue is projected to range from $6.3 billion to $6.9 billion.

Intel remains backlogged with inventory but still expects single-digit revenue growth in the third quarter, Merrill Lynch analyst Joe Osha says. Intel's stock price fell 76 cents, to $18.36.

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