NEW YORK — Intel Corp, the world's largest chipmaker, said net income fell 14 per cent from last year in the latest quarter, and it's looking at tough conditions in the new quarter.
Intel blames a difficult global economy for declining sales, but analysts believe a shift in spending from PCs to tablets and smartphones may be contributing. Still, the company beat analyst expectations for the latest quarter, after the company had lowered expectations twice.
The Santa Clara, California, company said its third-quarter net income was US$2.97 billion ($270 billion), or 58 cents per share, down from US$3.47 billion, or 65 cents per share, a year ago.
Excluding the amortization of some acquisition-related assets and related tax effects, Intel earned 60 cents per share, handily beating the average estimate of analysts polled by FactSet, at 50 cents per share.
Revenue fell 5.5 per cent to US$13.5 billion. Analysts were expecting US$13.22 billion, in line with the midpoint of Intel's own forecast.
The company says it expects about US$13.6 billion in fourth-quarter revenue, below the analyst forecast of US$13.7 billion. More significantly, it said it expects a gross margin of 57 per cent, well below the average for the last three years of 64 per cent. The gross margin is Intel's revenue minus the cost of making and selling the chips, so the lower forecast points indirectly to lower profit in the fourth quarter.
Intel's stock fell 24 cents, or one per cent, to US$22.11 in extended trading, after the release of the results. In regular trading, the shares rose 2.9 percent. The stock hit a 52-week low of US$21.40 on Friday.