Intel Lowers Quarterly Profit, Cites Bad Chips

Intel Corp. reduced first-quarter earnings per share by a penny after it had to write down inventory and reverse some sales because of a faulty chipset. The company, which earlier this month announced the recall of about a million motherboards that had problems with the memory, made the disclosure in a quarterly filing with the Securities and Exchange Commission. Analysts have estimated charges related to the chipset problem could be as much as $300 million. The problem is in the set of computer chips that surrounds a Pentium III processor. It causes some personal computers to shut down or freeze up. Santa Clara, Calif.-based Intel last month reported net income, including a gain on reversing a tax provision, of $2.73 billion, or 78 cents, for the quarter. Intel shares fell $6.06 to close at $117.88 on Nasdaq.