It’s been a tough year for PC manufacturers as they continue to struggle with declining sales thanks to a number of issues, including but not limited to consumer interest in tablets and other mobile devices. Even the world’s largest semiconductor chip maker is feeling the effects as Intel was just forced to lower their third-quarter revenue outlook once again.
During their second quarter earnings call in July, Intel said their third quarter outlook declined just slightly to $14.3 billion which would still have tied their previous earnings record. Now Chipzilla expects revenue for the third quarter to be $13.2 billion, plus or minus $300 million. The company cites reduced inventory in the supply chain, softness in the enterprise PC market segment and a slow demand in emerging markets as specific reasons for the new forecast. Intel notes that their data center business is meeting expectations, however.
Third quarter gross margin has been pushed to 62 percent, down a single percentage point from the previous expectation. They point out that expectations for R&D and MG&A spending remain unchanged. Full-year capital spending is also expected to drop below the low-end of their previous outlook of $12.1 billion to $12.9 billion.
It’s worth pointing out that the third quarter outlook doesn’t include the effect of any acquisitions, divestitures or other transactions that may or may not take place following today’s announcement. Furthermore, Intel has withdrawn all other quarterly and full-year expectations and will update those accordingly when they report third quarter earnings on October 16.
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