Intel Corp. (NASDAQ: INTC) today announced that third-quarter revenue would come in significantly lower than previously forecast. The world’s largest chipmaker originally forecast third-quarter revenue in the range of $13.8 billion to $14.8 billion, and now expects the total to be $13.2 billion, plus or minus $300 million.
In its announcement the company said:
Relative to the prior forecast, the company is seeing customers reducing inventory in the supply chain versus the normal growth in third-quarter inventory; softness in the enterprise PC market segment; and slowing emerging market demand. The data center business is meeting expectations.
Intel also lowered its gross margin forecast from 63% to 62%, plus or minus “a couple of percentage points.” The company expects to lower its capex spending below the bottom end of its previous range of $12.1 billion to $12.9 billion. R&D and marketing, general and administrative (MG&A) expenditures are not expected to change.
Intel reports third-quarter results on October 16th.
Intel is in a bind. The company’s chip customers are not selling as many PCs or servers as they had expected, and Intel’s lack of a real competitive product in the fast-growing mobile market is continuing to take its toll.
Intel’s comments about supply chain problems, weak enterprise sales and slowing emerging market demand are excuses for being slow off the mark in the mobile market. The company can still fix the problem, but it needs to focus more attention on mobile computing.
Shares are down about 2.5% at $24.46 in premarket trading this morning. The stock’s 52-week range is $19.52 to $29.27.