Intel Corp on Thursday, after posting lower-than-expected first-quarter sales results for its business of data center, has lowered its full-year revenue guidance.
The data center business remained the major contributor in driving the chipmaker’s growth in recent years when declining PC sales hurt the company’s chips selling business.
Although Intel remained successful to beat Wall Street’s revenue and profit estimates by a little margin in the fiscal first quarter, but due to weaker sales in China arising from the stockpiling of chips purchased by customers in last year, company’s sales in data center unit dropped by 6.3 percent to $4.9 billion against analysts’ expectations of $5.1 billion for the same, according to financial and data analytics firm Fact Set.
In China, customers last year had absolutely purchased extra data center chips fearing a tariff hike or supply issues arising from the trade disputes between the United States and China, Intel’s chief executive Bob Swan said in an interview.
The Santa Clara, California-based chipmaker, in January at the time of reporting its last earnings, had cut its 2019 revenue forecast of $71.5 billion to $69 billion. Forecasting for its second quarter that will end on June 30, the chipmaker estimated profit of 89 cents per share on revenue of $15.6 billion whereas analysts were expecting $1.01 per share on $16.85 billion for the same.
Intel’s first quarter net income declined to $3.97 billion, or 87 cents per share, which was $4.45 billion, or 93 cents per share in same quarter a year ago.
Company’s excluding items earnings of 89 cents per share though remained successful to beat analysts’ estimates of 87 cents for the earnings in reported quarter.
Client computing business, which deals with PC makers and is still the major contributor to company’s total sales, in the first quarter came on generating revenue for Intel that increased by 4.45 percent to $8.59 billion, up from $8.38 billion estimates by FactSet.