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Intel's first mid-quarter report to trim sales forecast

It'll have a job making previous targets, claim analysts

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Intel is expected to pare back its expectations for Q2 sales when it posts a mid-quarter financial statement later today - a first for the chip giant.

So analysts reckon, anyway. Eric Ross of Thomas Weisel Partners on Monday reiterated his prediction that the chip giant will lower its Q2 2001 guidance on the back of falling unit shipments, the price cuts it made to the Pentium 4 family in April and the latest decline in PC shipments since Intel made its forecast.

On the back of the quarter's fall in PC sales, IDC today trimmed its sales forecast for the year as a whole from 49.47 million units 45.3 million. That represents a decline of 6.3 per cent on 2000's figure rather than a gain of 2.2 per cent.

Other analysts have followed Ross. Merrill Lynch's Joseph Osha yesterday said he expects sales of $5.97 billion for the period. That's rather less than the $6.2-6.8 billlion Intel suggested in its most recent Q2 forecast.

"We think that hitting the low end of the $6.2 billion to $6.8 billion will be tough," said Osha.

Ross agrees - he expects the company to cut its expectations to $6.1 billion.

First Call's Wall Street analysts' average puts the exact figure at $6.29 billion and earnings at 11 cents a share.

Osha rates Intel a 'neutral'; Ross has INTC stock at 'market perform' status. The chip maker's shares rose nice cents to $29.82 yesterday in anticipation of the mid-quarter review.

For calendar 2001, Ross reckons P4 sales will be down more than 50 per cent on Intel's expectations. Intel has said it hopes to shift 20-25 million P4s - Ross believes it will only ship ten million. ®

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