Intel rolls eyes at flaccid PC biz, cuts $1bn off expected sales
Wall St warned of Q3 revenue downsize
Well, it looks like the Intel Developer Forum might be a bit more subdued next week than usual, with the chipmaker cutting its revenue projections for the third quarter, which ends this month.
In a statement announced before Wall Street opened this morning, Chipzilla warned investors that its sales in the third quarter would be between $12.9bn and $13.5bn, down from the $13.8bn to $14.8bn it had been projecting. That's somewhere between $900m and $1.3bn in lost revenues.
With PC sales slumping in part because of slowing economic growth in parts of Europe and Asia and skittishness in the United States and elsewhere, Wall Street had already been anticipating that Intel would not hit the high-end of the range. Analysts surveyed by FactSet had told the markets that they had expected Intel to rake in $14.21bn, but this seems a bit lower than anyone was anticipating.
You can blame tablets and slack demand for Ultrabook alternatives for more than a little of Intel's woes, but you can't blame servers, storage, and switching.
"Relative to the prior forecast, the company is seeing customers reducing inventory in the supply chain versus the normal growth in third-quarter inventory; softness in the enterprise PC market segment; and slowing emerging market demand," Intel said in its statement. "The data center business is meeting expectations."
In conjunction with the revenue cut, Intel also trimmed its gross margin expectations for the third quarter by one point and now says gross margins across all products will be 62 per cent, plus or minus 1 per cent. Intel added that it was backing off on capital spending a bit for 2012 and would now come in at the low-end of its range of $12.1bn to $12.9bn in cash outlays for the year on fabs and wafer-baking gear. Intel said that it would be re-using some of its gear to push down to the 14 nanometer node to save cash.
Intel will report its third quarter financials on October 16. ®