In a research report released Tuesday, Merrill Lynch analyst Joe Osha calls the cuts a "positive" move that could boost sales for the company. Nonetheless, Osha reduced his full-year earnings estimate for the company from 77 cents to 75 cents. Osha also reduced his revenue estimate for the company's second quarter ending May 31 from $6.96 billion to $6.76 billion, noting that sales for the period have been soft. Merrill Lynch continues to rate Intel's stock, which in trading today fell $0.31 to $28.35, as a strong buy. Intel says it plans to release a mid-year business update on June 6.
In some slightly positive news for the chip industry, an industry group predicted that overall sales would increase this year after falling 32% last year. This year, chip sales will increase 2.3% to $142 billion, according to World Semiconductor Trade Statistics.