Revenue at the world’s largest semiconductor maker will be $15.7bn (€14.26bn), plus or minus $500m (€456m), the company said, falling short of analysts’ estimates of $15.9bn (€14.5bn).
Intel’s third-quarter sales reached a record, lifted by processor orders from PC makers that decided to shore up their chip supplies ahead of the holiday shopping season.
So far, demand hasn’t come surging back, meaning that customers will again pare orders as they work through those stockpiles of chips.
It also backed off an annual forecast for double-digit revenue growth in server chips for data centres and corporate networks, its most profitable business.
“We’re not going to raise the flag and say everything’s good again,” chief executive Brian Krzanich said.
Intel shares are now 3.5% higher than at the start of the year.
Third-quarter net income rose to $3.38bn (€3.08bn), compared with $3.11bn (€2.84bn) in the same period a year earlier. Revenue rose 9.1% to $15.8bn (€14.4bn).
The company’s client computing group, which sells PC chips, posted third-quarter sales of $8.89bn (€8.11bn), a gain of 4.5% from a year earlier. Demand for PCs will increase in the fourth quarter in line with normal seasonal gains, the company said.
“It’s my concern that we just have an inventory build that could carry on into the first quarter,” said Kevin Cassidy, an analyst at Stifel Nicolaus & Co. While the PC market isn’t getting worse, it’s still shrinking.
Worldwide shipments fell 3.9% in the third quarter, market researcher IDC said earlier this month, a smaller drop than the decline of 4.1% in the second quarter.
Meanwhile, Dutch chip-making equipment manufacturer ASML, a key supplier to Intel and Samsung yesterday reported a 23% rise in third-quarter profit, missing analyst estimates.
Net profit reached €396m for July-September from €322m in the same period a year earlier. However, sales of €1.82bn beat analysts expectations of €1.72bn on the back of higher sales of ASML’s newest machines.
ASML forecast fourth-quarter revenue of €1.7bn-€1.8bn. Perhaps of greatest interest to company watchers, ASML reported three orders for the new machine, the NXE:3400 EUV system.
CEO Peter Wennink said six customers were “now actively engaged in the EUV introduction in both memory and logic.” As a result, the company booked €1.42bn worth of new orders in the quarter. ASML shares in Amsterdam rose 2.2%.