For the three months ended Sept. 25, Intel said it earned $1.9 billion, or 30 cents per share, on sales of $8.5 billion. In the same period last year, the company earned $1.7 billion, or 25 cents per share, on sales of $7.8 billion.

Analysts were expecting Intel to post a profit of 27 cents per share on sales of $8.4 billion, according to a survey by Thomson First Call.

The company also said it expects a weaker-than-usual holiday season, with overall sales between $8.6 billion and $9.2 billion.

"We've forecasted revenues a bit below what you'd normally expect for the fourth quarter," said Andy Bryant, Intel's chief financial officer. "It's not a dramatic change from normal, but just a little light."

Intel also warned that its gross margins are sagging, and it continues to suffer from excess inventory.

"Growth was not as high as we originally anticipated due to inventory adjustments at some of our major customers and lower than expected overall demand for PCs," CEO Craig R. Barrett said.

By: DocMemory
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