Intel headquarters in Santa Clara, California, April 29, 2011. Archive photo: Sixflashphoto / Wikimedia Commons, CC BY-SA 4.0. Cropped; adapted photo under the same license.
Intel shares plunged more than 25% in premarket trading Friday after the chipmaker forecast lower fourth-quarter revenue than in the previous three months and warned that a personal-computer slowdown would continue into next year.
The stock traded at $68.67, down $23.40, or 25.42%, in Nasdaq’s premarket quote timestamped 9:25 a.m. Eastern time October 30. The decline is measured against Thursday’s regular-session close of $92.07, not an intraday peak.
The sharp move followed Intel’s third-quarter results and fourth-quarter forecast, released Thursday afternoon. Today’s share-price fall is the new market consequence of that announcement.
PC slowdown expected into next year
Intel forecast fourth-quarter revenue of $15 billion to $16 billion, compared with $16.5 billion in the third quarter. It projected earnings of 10 cents per share under U.S. accounting rules and adjusted earnings of 25 cents per share.
Chief Financial Officer David Zinsner said the company expected the PC slowdown to continue at least through the first half of next year. He also said Intel would keep investing in capacity and working capital to increase supply.
Chief Executive Lip-Bu Tan said CPU demand remained strong despite near-term PC-industry headwinds. He identified unlocking additional supply for Intel’s Xeon family as an immediate priority.
Quarterly revenue grew before the selloff
Third-quarter revenue rose 21% from a year earlier to $16.5 billion. Earnings per share attributable to Intel were 60 cents under U.S. accounting rules, while adjusted earnings were 52 cents per share.
The company’s results and forecast therefore point to different periods: revenue grew in the quarter just reported, while the new outlook anticipates lower revenue in the fourth quarter than in the third.
The premarket quote is a point-in-time snapshot. It does not establish where Intel will trade after the regular U.S. session opens, and the company release does not by itself measure how much of the share-price move came from each part of its outlook.
JBizNews Markets Desk | NEW YORK
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