Intel posted a sharply lower second-quarter profit on Wednesday and issued a disappointing sales forecast as it slashed prices to compete with Advanced Micro Devices.
The company, which employs over 5,000 people in Leixlip, said it expected sales for the third quarter to be $8.3-$8.9 billion (€6.6-€7 billion).
Intel shares fell 1.4 per cent to $18.23 in extended trading on the Inet electronic brokerage. The stock has fallen about a third over the past year as Intel has struggled to stem AMD's market gains.
Net profit for the second quarter was $885 million, or 15 cents per share, down nearly 56 percent from a year earlier.
Second-quarter revenue fell 13 per cent from a year earlier to $8 billion, and was below the average forecast of $8.23 billion.
Excluding stock-based compensation, Intel earned $1.12 billion, or 19 cents per share, better than the 13 cents per share Wall Street had expected.
But inventory, a key concern of investors who have fretted over the impact of Intel's price cuts on profit margins, rose by about a fifth from the previous quarter to $4.3 billion.
Gross margin in the quarter was 52.1 per cent, higher than Intel's earlier forecast of 49 per cent but lower than the previous quarter's 55.1 per cent.
"Margins stayed up better in the second quarter, but now some of the price cuts will bleed into the third quarter. The margin recovery will probably be held off until Q4," said Cody Acree, an analyst with Stifel Nicolaus.
Intel chief financial officer Andy Bryant said pricing would remain an issue throughout the year but he expected Intel would regain some share from AMD.
