Intel announces slump in profits

Despite strong revenue growth, Intel this week reported a 6 percent drop in its third quarter profits. Sales are up 9 per cent from the same period last year to $7.3bn, but profits have fallen to $1.5bn.

This gives Intel earnings of $0.55 per share, two cents down on analysts' expectations of $0.57. Intel's share price fell 6 per cent this morning on opening and has remained flat.

Intel's profits were affected by its acquisition of Dialogic and Level One Communications, amongst others, and by a fall in Intel chip prices.

However, Intel CEO, Craig Barrett, described business as "solid" in the period, and stressed record shipments of microprocessors, chipsets and flash memory.

The company said it would have to spend another $100m over the next quarter to integrate its acquisitions.