Intel has reported falls in both sales and profits in the third quarter, as it battles a "tough economic environment". The world's largest maker of computer chips announced a net profit for the three months to 29 September of $2.97bn (£1.84bn), down 14% on the same period a year earlier. Net sales fell 5.5% to $13.46bn. Meanwhile IBM reported flat net profits of $3.8bn as demand for its software services and tight cost management offset the effect of a stronger dollar. Excluding UK pension-related charges, profits rose 3% to $3.9bn in the third quarter. Revenues at IBM came in at $24.7bn. 'Breakthrough innovation' Intel had warned last month that lower demand for computers from businesses and individuals would hit its sales. "Our third-quarter results reflected a continuing tough economic environment," said Paul Otellini, Intel president and chief executive, in the results statement. "The world of computing is in the midst of a period of breakthrough innovation and creativity. "As we look to the fourth quarter, we're pleased with the continued progress in Ultrabooks and phones and excited about the range of Intel-based tablets coming to market." Intel forecasts revenue between $13.1bn and $14.1bn in the fourth quarter.