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Intel narrows revenue target

Intel Corp. on Thursday narrowed the range of its quarterly revenue estimate toward the weaker end, saying its core microprocessor business was performing at the lower end of historical seasonal patterns.
/ Source: Reuters

Intel Corp. on Thursday narrowed the range of its quarterly revenue estimate toward the weaker end, saying its core microprocessor business was performing at the lower end of historical seasonal patterns.

Intel, the world's largest computer chip maker, said it expects first-quarter revenue to fall within a range of $8.0 billion to $8.2 billion versus its earlier range of $7.9 billion to $8.5 billion.

Wall Street's average revenue estimate was $8.27 billion, according to a poll of 26 analysts by Reuters Research, a unit of Reuters Group Plc.

Gross profit margin, a measure of the percentage of sales remaining after production costs, is expected to be about the same as its earlier target of approximately 60 percent.

In a scheduled mid-quarter update, Intel, based in Santa Clara, California, said its computer chips business was performing "consistent with the lower end of normal seasonal patterns," It said that its communications group was performing "in line" with its targets at the beginning of the quarter.

Even as business for most technology companies improves, analysts have warned in recent days that Intel's sales may suffer from weaker demand for notebook computers.

Taiwanese notebook manufacturers, who are contracted out by the major PC suppliers, have said notebook shipments have declined a sharper-than-usual 15 percent or 20 percent in January versus December.

Prudential Equity Group analyst Mark Lipacis wrote in a recent note that Intel's money-losing communications business was showing signs of strength.

Pricing and demand for Intel flash memory chips, used in cellular phones, was improving, Lipacis said, and a major notebook manufacturer has said Intel's wireless communications chips were being included in nearly half of all its notebook shipments.