Intel and IBM see big fall in profit

Intel computer Global PC sales are experiencing their longest decline in history

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Two tech titans, IBM and Intel, have reported big drops in net income.

Intel reported a second-quarter profit of $2bn (£1.32bn), down 29% from a year ago. For its part, IBM saw earnings for the same period fall 17% to $3.23bn.

Revenue for both companies slipped as well, with IBM's falling by 3% and Intel's down 5%.

Chipmaker Intel suffered as consumers and businesses switched away from traditional computers, while IBM made less on hardware and more on software.

Last quarter, IBM's revenues and profit fell short of analysts' forecasts for the first time in eight years.

As a result, the world's largest computer company slashed jobs and pivoted to focus on data analysis and cloud computing in an effort to stabilise its business.

More than 3,300 workers were cut from its ranks, and management at the top was changed.

The company has now upped its forecast for the rest of the year, while its April-to-June figures beat expectations.

Brave face

IBM is unaffected by the global slide in sales of traditional personal computers, since it sold that division of its business to China's Lenovo for $1.75bn in 2005.

For Intel - the world's largest semiconductor manufacturer - the picture is not as rosy.

After initially assuring investors that the outlook for the rest of the year would be bright, the company has now slashed its expectations in the wake of declining PC sales.

According to market research firm Gartner, global PC shipments fell 10.9% to 76 million in the second quarter.

The company is hoping to focus on selling its chips for use in tablets and smartphones as a way to compensate for this decline, but so far, this has not happened.

This is the fourth straight quarter of declining sales for the company, but its first with a new boss, Brian Krzanich, who succeeded Paul Otellini in May.

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