INTEL BEAT quarterly expectations and declared the worst was over for a battered tech sector, but its shares slid 5 per cent after it said economic uncertainty ruled out a clear revenue forecast.

The world’s top chipmaker, which employs almost 5,000 in the Republic, said personal computer sales hit a trough in the first quarter but there was still too much market and economic turbulence to allow a precise projection for the second quarter.

Intel said that for internal purposes, it was planning for revenue to come in flat after the first quarter’s $7.1 billion (€5.3 billion), versus analysts’ average estimate of $7 billion. Some, hoping for improvement in coming quarters, wondered if Intel was not being overly cautious. “The question is, ‘Is management being conservative’?” said Wedbush Morgan analyst Patrick Wang. “Especially with the CEO talking about PC sales bottoming out.”

Shares of the chip giant, a bellwether for the market and the global PC industry, fell, dragging down Standard Poor’s 500 and Nasdaq 100 stock index futures.

Gross margins, a closely-watched indicator for the company, came to 45.6 per cent in the first quarter – just above Wall Street’s forecast of 43.5 per cent.

“I would have liked to see higher gross margin guidance,” said analyst Bill Kreher. “The stock has had a heck of a run in recent weeks, so it may be time for a breather here, given that visibility does remain limited.”

For the second quarter, the company expects margins to remain in the mid-40s, despite speculation that Intel’s drive on the Atom – a cheaper microprocessor aimed at low-cost netbooks – would whittle them down. Intel said it does not expect Atom to dilute gross margins and indeed should drive operating profit expansion.

“We are seeing signs that a bottom in the PC market segment has been reached,” chief executive Paul Otellini said on a conference call. “I believe the worst is now behind us from an inventory correction and demand level adjustment perspective.” – (Reuters)