Intel suffers first-quarter profit downturn

But it predicts only good news for second quarter

Otellini: upbeat about Intel's second quarter

Intel believes it will buck the global downward economic trend with predictions of solid revenue of between $9bn (£4.6bn) and $9.6bn and a gross margin of about 56 per cent for its second quarter. For the full year Intel expects a gross margin of 57 per cent "plus or minus a few points."

Reporting its first-quarter results, the world's largest chip maker said profit was down 12 per cent compared with the same period last year and down 36 per cent compared with the previous quarter.

First-quarter revenue reached $9.7bn, a rise of nine per cent compared with 2007's first quarter and up 10 per cent on the previous three months.

Intel transferred assets worth $275m (£139m) to its Numonyx NOR flash memory joint venture with STMicroelectronics and said this would have an impact on second-quarter revenues.

"Our first-quarter results demonstrate a strengthening core business and a solid global market environment," said Paul Otellini, Intel CEO. "Looking forward, we remain optimistic about our growth opportunities as we continue to reap the benefits of our 45nm technology leadership."