Intel Shares Slide on Weak Outlook

Andrew Klips |

DELL, HPQ, STX, WDC, INTC, Thai floods, supply chain, disruption, hard drives, hard discs, global supply, manufacturing, PC, demandIntel Corp. (INTC) chimed in with earnings ahead of schedule and just ahead of the closing bell on Thursday, causing investors to divest some shares of the blue chip company from their portfolios.  Although profits tumbled in the fourth quarter, the Santa Clara, California-based company still beat Wall Street expectations, but offered a outlook that was less than expected.

For the last quarter, Intel posted revenue of $13.5 billion, down from $13.9 billion in the fourth quarter of 2011.  Net income fell 27 percent from $3.4 billion, or 64 cents per share, in Q4 2011 to $2.5 billion, or 48 cents per share, in the most recent quarter.  Analysts were expecting the company to report $13.5 billion in revenue and earnings of 45 cents per share.

A 7 percent increase in revenue to $2.8 billion in its Data Center Group helped offset softness in its PC Client Group, which slipped to $8.5 billion in the fourth quarter; down 6 percent compared to the year earlier quarter.  On a full-year basis, the PC Client Group was 3 percent lower compared to the 2011 while the Data Center arm grew by 6 percent.

“We made tremendous progress across the business in 2012 as we entered the market for smartphones and tablets, worked with our partners to reinvent the PC, and drove continued innovation and growth in the data center. As we enter 2013, our strong product pipeline has us well positioned to bring a new wave of Intel innovations across the spectrum of computing,” said Paul Otellini, Intel president and CEO.

The Intel chief was referencing computer makers in general struggling to sustain sales in PC’s as consumers have leaned more heavily towards mobile devices.

For the full year 2012, the company recorded revenue of $53.3 billion, operating income of $14.6 billion and net income or $11.0 billion, or $2.13 per share.  Across the year, Intel repurchased $4.8 billion of its stock (191 million shares).

Looking forward, Intel said that it expects revenue between $12.2 billion and $13.2 billion.  Wall Street was expecting $12.91 billion.  The company said that capital spending for 2013 will be in the range of $12.5 billion to $13.5 billion, figures higher than most analysts were predicting.

Shares of INTC had fallen from 10-year highs of $28.72 in May 2012 to 52-week lows of $19.23 in November, but have been steadily trekking ahead from those lows, including hitting its highest level in four months in Thursday’s session.  The stock price peaked at $23.06 during the day, but pulled-back to surrender some of the gains in the final minutes of the day to close at $22.68 (up 2.58%).  In after hours trading, the stock fell back further to have the stock down by about 3 percent.

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Companies

Symbol Name Price Change % Volume
INTC Intel Corporation 37.75 0.43 1.15 24,278,249
WILN Wi-LAN Inc 1.54 -0.03 -1.91 30,998

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