Intel downgrades full-year business outlook
Second quarter earnings down from last year
By Martyn Williams | Published: 12:34, 18 July 2012
Intel warned it expects to see lower-than-anticipated growth for 2012. The news came as the company posted mixed results for the second quarter of the year.
The world's biggest chip maker said net profit for the three months to the end of June was $2.8 billion, down 4% from the same period a year earlier. Revenues were $13.5 billion, up 3% from the second quarter of 2011.
"As we enter the third quarter, our growth will be slower than we anticipated due to a more challenging macroeconomic environment," said Paul Otellini, president and CEO of Intel.
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As a result, the company expects to record annual revenue growth of between 3% and 5% this year, down from the "high single digit" growth it had previously predicted.
Intel's results come against a general lack of consumer enthusiasm for desktop and laptop computers in preference to tablets and smartphones. Global PC sales reached 87.5 million units in the quarter, virtually unchanged from the same period a year ago, according to figures from IDC. The drop was steeper in established markets like the U.S., where PC shipments dropped 5.7 percent.
While Intel sells chips that go into both tablet PCs and smartphones, the chips are not as powerful and don't carry the same price tags and profit margins as Intel's faster PC processors. Intel is trying to rekindle interest in laptop PCs with the Ultrabook platform, a sleek, thin design intended to bring Macbook Air style to the Windows PC sector, but the machines are still at an early stage.