Intel's revenue hits lowest point since 2003

— 10:00 AM on July 20, 2006

Intel has unveiled its second-quarter financial results, and as expected by analysts, things aren't looking so good. Second-quarter revenue was $8 billion, the lowest the company has seen since the third quarter of 2003. Net income was the lowest since Q3 2002, meanwhile, at just $885 million. In contrast, Intel posted revenue of $9.2 billion and net income of $2 billion during last year's second quarter, and those numbers climbed to $10.2 billion and $2.5 billion just two quarters ago.

The low income can be blamed in part on Intel's shrinking gross margins, which, at 52.1%, were the lowest in over three years. These low margins are partly a result of Intel's recent price cuts, according to Capital Markets Analyst Bruce Diesen. Intel forecasts even lower 49% (± 2%) margins for the third quarter. Despite these forecasts, Intel expects third-quarter revenue to climb back to $8.3 to 8.9 billion.

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