Intel Corp. on Tuesday reported a third-quarter profit of $2.97 billion, or 58 cents a share, compared with a profit of $3.47 billion, or 65 cents a share, for the year-earlier period
Revenue was $13.46 billion, down from $14.23 billion
Adjusted profit was 60 cents a share
Analysts were expecting Intel to report a profit of 50 cents a share, on revenue of $13.2 billion, according to a consensus survey by FactSet
For the current quarter, Intel expects revenue of $13.6 billion, plus or minus $500 million Analysts were expecting sales of $13.7 billion, according to FactSet
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SAN FRANCISCO (MarketWatch)
Shares of Intel Corp. slipped in late trading Tuesday after the chip giant reported lower profit and sales, stung by what Chief Executive Paul Otellini called “continuing tough economic environment.”
Demand has been so weak that Intel INTC -3.62% announced it was scaling back production output, which is expected to lead to roughly $500 million in underutilization charges in the fourth quarter.
Intel was down 1.6% in late trading after closing with a nearly 3% gain in the day session.
The Santa Clara, Calif.-based chip maker beat analysts’ expectations for the third quarter, after scaling back sale projections last month,
Intel reported an adjusted third-quarter profit of 60 cents a share, on revenue of $13.46 billion. Analysts were expecting Intel to report a profit of 50 cents a share, on revenue of $13.2 billion, according to a consensus survey by FactSet.
For the current quarter, Intel expects revenue of $13.6 billion, plus or minus $500 million. Analysts were expecting sales of $13.7 billion, according to FactSet.
“They’re having to slow output hard in the fourth quarter,” Williams Financial analyst Cody Acree told MarketWatch.
“Up until just a little while ago they were building inventory to support expected market growth in the high single digits and huge adoption of ultrabooks.
Now the adjustment of production levels to demand reality means they have to hit the breaks pretty hard and hence the charge.”
Analysts have recently scaled back expectations for strong sales of new ultrabooks, the ultrathin notebooks based on Intel’s design and stronger PC demand based on the launch of Windows 8.
For the third quarter, Intel reported an 8% drop in PC chip sales.
The company’s data center unit, which makes server chips, posted a 6% year-over-year gain.
But Evercore Partners analyst Patrick Wang also noted that Intel’s data center business reported a 5% sequential drop in sales which said was “likely a reflection of enterprise slowing and companies rationalizing their year-end spend. “
“This was supposed to be the rock we all leaned on,” he told MarketWatch
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