Intel Corp. shares fell after the world’s largest semiconductor-maker reported a secondstraight quarter of declining sales, hurt by diminishing demand for personal computers.
Fourth-quarter revenue dropped 3 percent to $13.5 billion, the Santa Clara, Calif.-based company said Thursday in a statement. Net income fell to $2.47 billion, or 48 cents a share. Analysts on average estimated sales of $13.5 billion and earnings of 45 cents, according to data compiled by Bloomberg.
Intel, whose microprocessors run more than 80 percent of the world’s PCs, is struggling as that market faces a secondstraight year of lower sales, according to analysts at JPMorgan Chase & Co.
Intel hasn’t yet gained ground with mobile chips aimed at taking business from Qualcomm Inc. in smart phones and tablets, devices that are drawing buyers who have less money to spend in a weak economy.
“I don’t think things get better in PCs,” said Cody Acree, an analyst at Williams Financial Group in Dallas.
Intel, which released the earnings report just before markets closed in New York, dropped as much as 3.9 percent in extended trading. They had risen 2.6 percent to $22.68 at the close. The stock dropped 15 percent last year, compared with a 13 percent gain in the Standard & Poor’s 500 Information Technology Index.
Intel predicts that first-quarter revenue will be $12.7 billion, plus or minus $500 million. That compares with an average analyst projection of $12.9 billion. Gross margin will be about 58 percent. A year earlier, saleswere $12.9 billion, while gross margin was 64 percent.
Intel said it will spend $13 billion, plus or minus $500 million, on new plants and equipment in 2013. That number, which compares with an average analyst estimate of $9.99 billion, raises questions about how the chipmaker will be able to fund such an expansion while maintaining dividend and share buybacks from the cash it generates, said Daniel Berenbaum, a New York- based analyst at MKM Partners.
“It’s a gigantic number,” said Berenbaum.
Business, Pages 22 on 01/18/2013