Intel sees profit slump by 55 per cent - but also detects green shoots

Intel sales were well down year-on-year

Intel reported a year-on-year profit fall of 55 per cent in the first quarter of 2009, but believes the worst of the downturn in PC sales is over.

The chip giant achieved revenue of $7.1bn (£4.8bn) in the first three months of its financial year, down 26 per cent on the same period in 2008, while net income of $647m (£434m) was down 55 per cent annually but up 176 per cent compared to the previous quarter.

Chief executive Paul Otellini said the market is showing signs of picking up.

"We believe PC sales bottomed out during the first quarter and that the industry is returning to normal seasonal patterns," he said.

"Intel has adapted well to the current economic environment and we're benefiting from disciplined execution and agility.”

Despite Otellini’s optimism, Intel declined to make a specific forecast for its sales or profit over the remainder of the financial year, citing “continued economic uncertainty and limited visibility”.

“Current uncertainty in global economic conditions makes it particularly difficult to predict product demand and other related matters and makes it more likely that Intel's actual results could differ materially from expectations,” said the company in its financial statement.

The firm said that “for internal purposes” it is planning for flat revenue growth between the first and second quarters of the year.