Chipmaker Intel Corp is cutting its sales forecast for the quarter, adding fresh evidence that a rickety economy is putting a damper on the back-to-school shopping season.
Intel is the world’s biggest provider of microprocessors for PCs and a bellwether for the broader technology industry.
In a statement on Friday, the company said it is seeing “weaker than expected demand for consumer PCs in mature markets,” including the US and Europe.
The warning comes a little more than a month after Intel reported its biggest quarterly profit in a decade. However, those results were fueled by a rebound in technology spending at corporations, many of which held off replacing older computers during the recession. Home compter purchases are another matter. Uncertainty about jobs is still keeping people’s spending in check.
Intel said it now expects revenue of US$10.8 billion to US$11.2 billion for the fiscal third quarter, which ends in next month. That compares with a previous forecast of US$11.2 billion to US$12 billion. On average, analysts surveyed by Thomson Reuters expected US$11.5 billion.
Many investors simply did not believe that Intel would be able to hit the higher numbers because of signals from other PC-industry suppliers that sales were collapsing.
Those fears were the main reason why Intel’s stock has fallen about 13 percent since it issued its original guidance on July 13. The fall erased about US$16 billion in shareholder wealth through Thursday’s close.
After the company released its revised outlook, the company’s shares rose US$0.31, or 1.7 percent, to US$18.49 in midday trading on Friday, amid a general lift on Wall Street.
Last week, PC makers Dell Inc and Hewlett-Packard Co also raised red flags about what is normally a robust season for sales.
Dell chief financial officer Brian Gladden said in a conference call that the back-to-school shopping season has been “a little weaker than we would have expected.”
Todd Bradley, head of HP’s PC division, told investors that the company saw some “softness” in the consumer laptop market and that back-to-school shopping started “somewhat late for us.”