INTEL, WHICH employs nearly 4,000 people in Ireland, predicted higher second-quarter sales than some analysts had estimated as it ships new personal-computer and server chips and shortages of hard drives abate.

Sales in the current period will be $13.6 billion, plus or minus $500 million, the California-based company said in a statement last night.

Analysts on average had estimated revenue of $13.43 billion, according to data compiled by Bloomberg.

Sales were $13.03 billion a year earlier. Intel is rolling out updated chip designs and its customers are expanding their lines of slim Ultrabook computers, created to stoke consumer interest in laptops.

Intel shares were little changed in late trading after the announcement. Earlier, they gained less than 1 per cent to $28.47 at the close in New York.

That left the shares in the world's largest semiconductor manufacturer up 17 per cent this year.

Investors watch Intel's earnings as a broad indicator of demand for desktop, server and laptop computers.

For the first quarter, Intel said net income was $2.74 billion, or 53 cents a share, compared with $3.16 billion, or 56 cents, a year earlier.

Sales rose to $12.9 billion. Analysts had predicted profit of 51 cents a share on sales of $12.85 billion.

In January, Intel predicted sales of $12.8 billion, plus or minus $500 million. Gross margin, or the percentage of sales remaining after deducting costs of production, will be about 62 per cent in the second quarter, said Intel.

It had predicted gross margin would be about 64 per cent this year.

The company projected it would spend $10.1 billion on research and development and about $12.5 billion on new plants and machinery.

Worldwide PC shipments will increase 4.4 per cent this year to 368 million units, according to researcher Gartner.

Intel's biggest customers are Hewlett-Packard, Dell and Quanta Computer.

The company is a key employer for Ireland and has facilities in Leixlip, Co Kildare and Shannon, Co Clare. - (Bloomberg)