SAN FRANCISCO - Intel, the world's biggest chipmaker, posted a sharply lower second quarter profit today and issued a disappointing sales forecast as it slashes prices to compete with Advanced Micro Devices Inc.
The technology heavyweight said it expected sales for the third quarter to be between US$8.3 billion and US$8.9 billion ($13.5-14.5 billion), lower than Wall Street's average forecast of US$9.03 billion, according to Reuters Estimates.
"The revenue number is definitely a worry," said Eric Ross, an analyst at ThinkEquity Partners. "I think they are going to do worse than this. There is a pricing dynamic in the industry. AMD and Intel are in a price war. Intel is probably going to underperform these numbers."
Intel shares fell 1.4 per cent to US$18.23 in extended trading on the Inet electronic brokerage. The stock has fallen about a third over the past year as Intel has struggled to stem AMD's market gains.
Net profit for the second quarter was US$885 million, or 15 cents per share, down nearly 56 per cent from a year earlier.
Second-quarter revenue fell 13 per cent from a year earlier to US$8 billion, and was below the average forecast of US$8.23 billion.
Excluding stock-based compensation, Intel earned US$1.12 billion, or 19 cents per share, better than the 13 cents per share Wall Street had expected.
But inventory, a key concern of investors who have fretted over the impact of Intel's price cuts on profit margins, rose by about a fifth from the previous quarter to US$4.3 billion.
- REUTERS
Intel posts disappointing profit
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