Computer-chip giant Intel reported a 55-per cent drop in first-quarter income on Tuesday but said that it believed sales had bottomed out and that business was returning to normal.
"We believe PC sales bottomed out during the first quarter and that the industry is returning to normal seasonal patterns," Intel chief executive Paul Otellini said in announcing the results.
The projection was significant because Intel's chips power the vast majority of personal computers, and the company's performance is often seen as a reliable predictor of the health of the technology sector. Other top technology bellwethers including Microsoft and IBM are also due to report their earnings in the next two weeks.
Intel said its first-quarter profit was $647 million, compared to a profit of $1.44 billion a year ago. In the same period, revenue dropped 26 per cent to $7.14 billion from $9.67 billion a year ago.
Though such results would usually signal a devastating performance, they were positively rosy in comparison to the 90-per cent drop Intel had in its fourth-quarter net income - which was among the three worst performances by the company in the last 25 years.
Intel fared worst in the Asia-Pacific region, where revenue was down 51 per cent. Revenue dropped by 21 per cent in the Americas, 18 per cent in Europe and 10 per cent in Japan.