Intel Cuts Sales Outlook as PC Sales Slump


Intel Corp., the world’s largest maker of chips for PCs, put a brave face on the decline of global PC sales earlier this year, saying it expected its own sales to grow. On Wednesday, it backtracked, saying sales will be flat.

Intel is hoping that sales of processors for servers, tablets and smartphones will compensate for the drop-off in PC sales. The downward revision of the company’s outlook is an admission that Intel chips haven’t made it into many mobile devices.

“I’ve made it Intel’s highest priority to create the best products for the fast growing ultra-mobile market segment,” said new CEO Brian Krzanich in a statement.

The Santa Clara, Calif. chipmaker said revenue for the April to June period was $12.8 billion. That was down 5 percent from a year ago, and just below the company’s projections and analyst expectations of $12.9 billion.

Net income for the quarter was $2 billion, or 39 cents per share. That was down 29 percent from a year ago.

Intel shares rose 2 cents to $24.17 in extended trading, after the release of the results.

Worldwide shipments of personal computers fell 11 percent in the April-June period, according to data from research firms Gartner and IDC, as people continued to migrate to tablets and other mobile devices. It’s the fifth consecutive quarter of decline, making it the longest slump in PC history, according to Gartner. Previous sales declines were related to recessions; this is the first time the PC is yielding to new devices.

Intel revealed a notable win in the quarter, as it got one of its chips into an Android-based Samsung tablet, replacing a chip based on technology from Britain’s ARM Holdings PLC.

Intel named Krzanich, formerly the chief operating officer, to the CEO post in May. He replaced Paul Otellini, who surprised observers in November when he announced his intention to retire.

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