Intel says third-quarter revenue below guidance

Revenue for the current three-month period is being squeezed by weaker than expected demand for consumer PCs in "mature" markets, the chipmaker says.

Intel said Friday that its third-quarter revenue will be below the company's prior outlook.

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The world's largest chipmaker now expects third-quarter revenue to be $11 billion, plus or minus $200 million, compared with the previous expectation of between $11.2 and $12 billion.

Revenue has been squeezed by weaker than expected demand for consumer PCs in "mature" markets, but inventories across the supply chain appear to be in-line with the company's revised expectations, Intel said.

That jibes with a cautious forecast for the third quarter from IDC. The market researcher said last week that global market demand for processors is expected to be weak in August.

Intel's expectation for third-quarter gross margin, a key profit indicator, is now 66 percent, plus or minus a point, lower than the previous expectation of 67 percent, plus or minus a couple of points. "The impact of lower volume is being partially offset by slightly higher average selling prices stemming from solid enterprise demand," Intel said.

All other expectations for the third quarter remain unchanged. The outlook for the third quarter does not include the effect of any acquisitions, divestitures or similar transactions that may be completed after Aug. 26.

Intel said last week that it plans to buy security software company McAfee for more than $7 billion, a deal that Intel expects to close by year's end. It also has a deal in the works to acquire the cable modem unit of Texas Instruments for an undisclosed sum, with the assumption that it will close in the fourth quarter.

In the quarter ended June 26, Intel earned $2.9 billion , or 51 cents a share, one of the biggest profit showings in its history.

About the author

Brooke Crothers writes about mobile computer systems, including laptops, tablets, smartphones: how they define the computing experience and the hardware that makes them tick. He has served as an editor at large at CNET News and a contributing reporter to The New York Times' Bits and Technology sections. His interest in things small began when living in Tokyo in a very small apartment for a very long time.

 

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