Intel cuts full-year revenue forecast, misses on data-centre sales

(Reuters) - Chipmaker Intel Corp cut its full-year revenue forecast on Thursday and missed analysts' estimates for first-quarter sales for its higher-margin data centre business, sending its shares down 7 percent after hours. The lowered full-year revenue forecast adds to concerns that an industry-wide slowdown could persist until the end of 2019 and follows a similar warning earlier this week from chipmaker Texas Instruments. Intel marginally beat Wall Street targets for revenue and profit in the first quarter, but sales in the data centre group unit fell 6.3 percent to $4.90 billion, hit by weakness in China and inventory correction.

Reuters April 26, 2019 03:06:12 IST
Intel cuts full-year revenue forecast, misses on data-centre sales

Intel cuts fullyear revenue forecast misses on datacentre sales

(Reuters) - Chipmaker Intel Corp cut its full-year revenue forecast on Thursday and missed analysts' estimates for first-quarter sales for its higher-margin data centre business, sending its shares down 7 percent after hours.

The lowered full-year revenue forecast adds to concerns that an industry-wide slowdown could persist until the end of 2019 and follows a similar warning earlier this week from chipmaker Texas Instruments.

Intel marginally beat Wall Street targets for revenue and profit in the first quarter, but sales in the data centre group unit fell 6.3 percent to $4.90 billion, hit by weakness in China and inventory correction. Analysts had expected revenue of $5.10 billion, according to financial and data analytics firm FactSet.

The company has turned to the server chips it supplies data centre operators for growth in recent years.

The chipmaker cut its 2019 revenue forecast to $69 billion, from the $71.5 billion it told investors to expect when it last reported earnings in January.

"Looking ahead, we're taking a more cautious view of the year, although we expect market conditions to improve in the second half," said Chief Executive Officer Bob Swan.

A year-long trade war between China and the United States and weakening smartphone sales have taken a toll on the global semiconductor industry. Investors are banking on the launch of 5G telecom network and demand for chips used in self-driving vehicles to reignite growth.

The Santa Clara, California-based chipmaker also said it expects revenue and profit of $15.6 billion and 89 cents per share for its second quarter that ends in June, compared with analysts' expectation of $16.85 billion and $1.01 per share.

"A bad as the outlook is for 2Q19 and FY19 due to weaker macro softness, we think there remain further headwinds due to the increased competitive threat from AMD into 2H19 and 2020," said Kinngai Chan, an analyst with Summit Insights Group.

Net income fell to $3.97 billion, or 87 cents per share, in the first quarter, from $4.45 billion, or 93 cents, from a year earlier.

Excluding items, the company earned 89 cents per share, beating analysts' estimate of 87 cents.

Revenue in Intel's client computing business, which caters to PC makers and still the biggest contributor to sales, rose 4.45 percent to $8.59 billion, beating FactSet estimates of $8.38 billion.

Shares were trading at $53.33 in trading after the bell.

(Reporting by Sayanti Chakraborty in Bengaluru and Stephen Nellis in San Francisco; Editing by Sriraj Kalluvila)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.