Intel profit down 64%
  04/17/2001 3:35:24 PM MDT Albuquerque, Nm
  By Dustin D. Brand; Owner AMO

In an attempt to up their profits, Intel has been cutting prices, but it wasn't enough.   SANTA CLARA, CA - Intel Corp. , the world's No. 1 computer chip maker, on Tuesday said first-quarter profits fell 64 percent from a year earlier, slightly exceeding analyst expectations, and forecast second-quarter sales would fall about 20 percent from last year.

  The Semiconductor sector, as I've reported on many times before has been hit hard this last year and this year. Intel amongst others have been dropping prices in hopes of spearheading spending, but if Intel is any Judge of that effort, it hasn't worked for them. Back on March 5th, 2001, Intel lowered their prices on their chips by 19%. On the 13th of April, Intel lowered prices again. Now on the 17th, we see that Intel's profits are 64% less than the same time last year.

  The company, based in Santa Clara, Calif., said that profits before acquisition-related charges fell to $1.1 billion, or 16 cents a share, for the quarter ended March 31 from $3.04 billion, or 43 cents, in the year-earlier quarter. Sales fell 16 percent to $6.68 billion from $7.99 billion.

  Intel shares closed at $26.06, down $0.24, on Nasdaq before it released its results. Since the end of last year, the stock has underperformed the Standard & Poor's 500 Index by about 4 percent and the Philadelphia Semiconductor Index by about 15 percent.

  It's not that Intel is alone in this however, the Semiconductor Sector in general has caused prices to plumet, which is good for consumers, but bad for the manufacturers because even with the price drops, demand isn't high enough to pull them out of their slump.

  Intel does have something going for them however. Intel has a huge contract with Microsoft on MS's upcoming XBOX Game Platform. Each XBOX comes equipped with an "Flip Chip PGA" 733Mhz Pentium III, the fastest kind of all the PIII Chips, and will be a huge payout for Intel since it's cheap for them to produce in mass quantities.

  Intel also has other things up their sleeves. Read the "Intel GIGA PC" article I wrote below to see what else they have in store for this upcoming Holiday Season.

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