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Intel narrows Q1 revenue forecast

Lower guidance

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Intel issued a business update yesterday to provide a more accurate estimate of the company's first quarter sales. Having previously forecast revenues somewhere between $7.9bn and $8.5bn, the chip giant narrowed its numbers to $8.0-8.2bn.

That puts the new average below the one implied by the previous prediction - and below analyst expectations. Pacific Crest Securities, for example, recently put the range at $8.1-8.3bn. The quarter ends on 27 March.

Intel said demand for its microprocessors "is consistent with the lower end of normal seasonal patterns and significantly higher than in the same period last year". In other words, demand is weaker than the previous quarter, as is usually the case. But the decline is at the bottom end of expectations.

In many ways, Intel has only itself to blame. Putting back the release of Prescott, its 90nm Pentium 4 processor, to February and issuing the part at lower clock speeds than expected can't have helped matters. Delaying the release of 'Dothan', its second-generation mobile Pentium M processor to Q2, will have hurt sales too.

Intel's forecast for the quarter's gross margin remains the same: 60 per cent plus or minus a percentage point. ®

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