Intel Corp. (INTC) cut its third-quarter revenue and
gross-margin target because of weaker-than-expected demand for
consumer personal computers in developed markets.
Shares were down 1.5% in recent trading to $17.90 after being
halted at $18.17 ahead of the 9:58 a.m. EDT disclosure.
The news follows a surge in demand for the semiconductor
industry, led by Intel. It reported record results in the second
quarter and in July projected continued strength this quarter. It
has been benefiting from a strong rebound in demand for personal
computers and other electronic devices after a sharp drop during
the recession a year ago, but there have been concerns of late of
potential cooling in light of broader economic worries.
But Intel now expects revenue of $10.8 billion to $11.2 billion
and gross margin of 66%, plus or minus one percentage point. The
July forecast - revenue of $11.2 billion to $12 billion and gross
margin 67%, plus or minus a couple of percentage points - was above
analysts' then-expectations.
The company said the impact of lower volume is being "partially
offset" by higher average selling prices because of "solid"
enterprise demand.
Intel added said the outlook doesn't include the affect of any
acquisitions or divestitures that might be completed from here out.
The company last week agreed to buy computer-security software firm
McAfee Inc. (MFE) for $7.68 billion.
Third-quarter results are due Oct. 12.
-By Nathan Becker, Dow Jones Newswires; 212-416-2855;
nathan.becker@dowjones.com