Intel lowers Q3 profit forecast on back of weak PC demand
INTEL, the world's biggest chipmaker, yesterday cut its third-quarter revenue forecast, citing weaker-than-expected consumer demand for personal computers in mature markets.
The company, which employs about 4,500 people at its plant in Leixlip, Co Kildare, dominates the market for PC microprocessors. Sales could miss the company's previous forecast of $12bn (€9.4bn) by up to $1bn. Gross profit margin would not reach the high end of the previous forecast, Intel also said.
Intel did not comment on whether falling sales would have any effect on the Irish arm of the business.
Consumers in the US, Europe and China are curtailing computer purchases, said Mahesh Sanganeria, an analyst at RBC Capital Markets. The outlook from Intel, whose chips run more than 80pc of the world's PCs, adds to evidence that the US economic recovery is losing steam and may presage lower forecasts from other technology providers.
"Overall, you have to look at how the economy is doing," Mr Sanganeria said.
The San Francisco-based analyst has an "outperform" rating on Intel shares. "Everything follows that. Consumer demand in the US is the weakest."
The lower forecast highlights a divergence between consumers, who are increasingly tightening belts, and companies, which have ramped up demand for computers and other technology gear. Intel said purchasing by business customers kept gross margins from declining further.
Intel's shares have slumped 10pc this year on concerns that company growth would slow. It expects to provide full-year forecasts when it releases third-quarter results on October 12.