FILE PHOTO: An Intel logo is seen at the company’s offices in Petah Tikva, near Tel Aviv, Israel October 24, 2011. REUTERS/Nir Elias/File Photo
(Reuters) – Intel Corp forecast current-quarter revenue and profit below analysts’ estimates and missed on fourth-quarter revenue expectations on Thursday, as a slowdown in China hit demand for its data center chips.
The company’s shares fell 7.7 percent in extended trading and also undid part of a chip stock rally earlier in the day due to better-than-feared quarterly results from a clutch of chipmakers such as Texas Instruments Inc, Xilinx Inc and Lam Research Corp.
Intel forecast first-quarter revenue of $16 billion and adjusted earnings of 87 cents per share.
Analysts on average were expecting revenue of $17.35 billion and a profit of $1.01 per share, according to IBES data from Refinitiv.
Intel has turned to the server chips it supplies data center operators for growth in recent years. However, fourth-quarter revenue in that higher-margin business came in at $6.07 billion, below expectations of $6.35 billion, according to financial and data analytics firm FactSet.
The company said data center missed expectations “on softer China demand” and “cloud deceleration”.
Intel reported net income of $5.20 billion, or $1.12 per share, for the fourth-quarter ended Dec. 29, compared with a loss of $687 million, or 15 cents per share, a year earlier. (bit.ly/2FN4ac0)
Net revenue rose to $18.66 billion from $17.05 billion, but missed estimates of $19.01 billion.
Excluding items, the company earned $1.28 per share, above expectations of $1.22.
Reporting by Sonam Rai in Bengaluru and and Stephen Nellis in San Francisco; Editing by Sriraj Kalluvila