UPDATE:Intel reported better-than-expected quarterly results this afternoon, but cut its full year revenue forecast as weakness in mature consumer markets persists.
The Santa Clara, Calif., based chip maker says it now expects full year revenue to grow between three and five per cent, down from earlier guidance of a high-single digit advance.
At that rate, Intel will tally sales between $55.6 and $56.7 billion this year, as much as $1 billion below previous estimates.
The company also said it expects third quarter revenue of $14.3 billion, slightly below Wall Street expectations for guidance of $14.5 billion.
“As we enter the third quarter, our growth will be slower than we anticipated due to a more challenging macroeconomic environment,” Intel Chief Executive Paul Otellini said. “With a rich mix of Ultrabook and Intel-based tablet and phone introductions in the second half, combined with the long-term investments we’re making in our product and manufacturing areas, we are well positioned for this year and beyond.”
During its second quarter, Intel recorded net income of $2.8 billion, or $0.54 a share. That was above forecasts for $0.52 per share. Revenue was in line with analyst projections, at $13.5 billion.
The company’s PC division saw revenues improve 3 per cent to $8.7 billion, while its data group advanced 14 per cent sequentially to $2.8 billion.
Revenue in the Americas remained challenged, declining 1 per cent from the year-ago period. Asian sales picked up that slack, improving 5 per cent to nearly $9 billion.
“Intel is not immune to macro headwinds but we believe Intel is well positioned to benefit from new product introductions, continued strong execution and stable PC demand,” Deutsche Bank’s Ross Seymore says. “Additionally, we expect MPU price competition to remain benign due to AMD being fabless.”
Shares are moving marginally in after hours trade.
Intel is set to report second quarter results after U.S. markets close at 4:00 p.m., with analysts looking for the investment banking giant to report earnings per share of $0.52 a share.
Revenue is projected to increase roughly four per cent to $13.5 billion from the year ago period.
The report will be closely watched as Intel’s chips power a majority of PCs manufactured each year.
“We continue to believe Intel is accelerating advancements in process technology to both defend and potentially expand its leadership,” Jefferies’ Mark Lipacis says. “We remain on the sidelines as we are concerned the Street has high expectations for ASPs, gross margins, servers and ultrabooks.”
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