Intel cuts 2013 revenue forecast over PC woes
SAN FRANCISCO: Intel cut its full-year revenue forecast and scaling back spending as it readjust to the declining PC sales and economic weakness in China.
The forecast and cut in capital spending were announced on Wednesday in the company’s quarterly earnings report, the first under new chief executive Brian Krzanich. The new CEO recognised that Intel failed to leverage on the mobile market with it’s Atom mobile chips where Qualcomm is the leading chip supplier, customers want more options.
Although Intel is still No 1 in PC, they are cutting 2013 capital spending to $11 billion, plus or minus $500 million. The cut follows a similar reduction from $13 billion to $12 billion in April. Intel said it expects 2013 revenue to be flat from the year before.
Global shipments of personal computers dropped 11% in the second quarter, the fifth straight quarterly decline in a market that has been devastated by the popularity of tablets.
Intel has shown some recent signs of improvement in mobile, progress Krzanich is eager to build on. Samsung Electronics has chosen an Intel processor for one of its top-tier Android tablets for the first time.
Intel posted second-quarter revenue of $12.8 billion and said revenue in the current quarter would be $13.5 billion, plus or minus $500 million.
Analysts expected $12.896 billion in revenue for the second quarter and $13.732 billion for the current quarter, according to Thomson Reuters I/B/E/S.
For the second quarter, Intel reported net earnings of $2.0 billion, or 39 cents a share, in line with expectations. That compared with $2.827 billion, or 54 cents, in the same quarter last year.
Shares of Intel fell about 4% in extended trade after closing down 0.41% at $24.15 on the Nasdaq.