LOS ANGELES - INTEL Corp's top executive told employees in an internal communication that the company could potentially report its first loss in more than two decades in the current quarter, Bloomberg reported on Tuesday.

Last week, Intel, the world's largest chipmaker, posted a 90 per cent drop in fourth-quarter profit and a 23 per cent decline in revenue, as it struggles with waning demand. The last time the company reported a loss was in 1986.

'We are not going to wake up in six months with everything rosy again,' Chief Executive Paul Otellini told employees last week in a memo, Bloomberg reported. After 87 quarters of profit, the first quarter is 'too close to call,' the communication said, according to Bloomberg.

Intel spokesman Chuck Mulloy said the company doesn't comment on internal employee communications, adding that 'we never forecast profitability either internally or externally.' Intel confirmed that Mr Otellini conducted a Webcast for its employees to give an overview of its recent quarterly results, but declined to provide details of an internal company account that summarised Mr Otellini's remarks.

There will be no budget for merit pay or promotions, and Intel will only refill vacant jobs on a selective basis, Mr Otellini said in the memo.

'We will be focusing on every nickel,' he was quoted as saying. 'Every dollar counts.'

Last week, the Santa Clara, California-based company said it expects margins to bounce back to 'healthy' levels by the second half of 2009, but did not give a detailed quarterly forecast when it issued earnings, citing economic uncertainty. -- THOMSON REUTERS