A range of high-tech stocks traded down sharply after technology giant Intel disappointed markets with fourth-quarter revenues of $10.2 billion (€8.4 billion)which fell short of analysts' expectations of $10.6 billion.
When trading closed last night Intel shares were at $22.60, down $2.92 or 11.5 per cent, and Yahoo shares were at $35.18, down $4.93 or 12.3 per cent. While Intel came under selling pressure, its rival AMD performed well on the day, up 3.3 per cent at one point.
Intel's full-year profits were $8.7 billion, up from $7.5 billion in 2004. Revenues for the year were up $4.6 billion to $38.8 billion, but that was less than analysts' expectations of $39.2 billion.
The microprocessor manufacturer, which employs 5,150 people directly and indirectly at its main Irish operation in Leixlip, Co Kildare, and another 125 at a facility in Shannon, blamed the figures on lower than expected sales of chips for desktop computers and falling prices.
Intel is hoping its Viiv initiative to create technologies that enable consumers to work with digital media content will boost revenues this year. It also expects to see strong demand for its Centrino Duo for laptops and Core Duo for desktops.
"People may focus on the fourth quarter but overall, it's been a very good year," said David Griffin, director of finance with Intel Ireland.
Despite disappointing the markets, the fourth quarter was the first time Intel broke through the $10 billion revenue barrier in a single quarter.
Mr Griffin said December dragged down the figures for the quarter and problems with chipset supply added to the revenue shortfall. "We overestimated our ability to ramp up supply," he said.
Intel manufactures chipsets, the circuits which its processors plug into on a PC, at a number of facilities worldwide including its operation in Leixlip.
Mr Griffin said demand from PC manufacturers and its distributors was weaker in the fourth quarter. As a result of inventory held by its customers, Intel also downgraded its revenue expectation for the first quarter to $9.1- $9.7 billion
Internet company Yahoo, which announced 400 new jobs here last year, missed Wall Street earnings and revenue expectations, despite revenue growing 39 per cent to €1.5 billion.
IBM, the world's largest technology company, reported revenues of $24.4 billion, lower than expectations. But it managed to grow net profit by 13 per cent.
Meanwhile trading on the Japanese stock market had to be suspended for a period yesterday after new allegations surfaced that a company called Livedoor tampered with its earnings statements, prompting a suspension of the company's shares and chaos in the stock market.
Fallout from the Livedoor investigation triggered a sell-off in the stock market for a second day, forcing the early shut-down of the Tokyo Stock Exchange after the number of transactions threatened to exceed its computer system's capacity.
