Intel revenue warning causes stock to slide 18.5%

Processor manufacturer Intel saw its stock price slide more than 18% on Friday (7 June 2002), a day after the chip maker lowered...

Processor manufacturer Intel saw its stock price slide more than 18% on Friday (7 June 2002), a day after the chip maker lowered its second-quarter revenue forecast due to slower-than-expected business in Europe.

Intel's shares on the Nasdaq exchange closed on Friday at $22 (£15), down $5 (£3) on the day, or 18.5%, to reach their lowest closing price in eight months. Shares of Advanced Micro Devices (AMD), one of Intel's main rivals, also dipped, falling 7.5% to close at $9.81.

Intel said on Thursday (6 June) in a mid-quarter business update that its revenue for the quarter, which ends 29 June, probably will be between U$6.2bn and $6.5bn, down from its previous guidance of $6.4bn to $7.0bn.

Besides weak demand in Europe, the company said its results for the quarter have been hurt by a "weaker than expected mix," meaning it sold more of its lower priced Celeron processors than it had forecast, and fewer of its higher priced Pentium 4 chips. Intel said it expects performance in the second half of the year to be brighter.

Analysts had been expecting second-quarter revenue of $6.7bn and earnings per share of $0.15, according to a consensus estimate from Thomson Financial/First Call. In the second quarter of 2001, Intel posted revenue of $6.3bn and earnings per share of $0.12.

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