* Second-quarter rev slightly below Street
* Quarterly EPS 54 cents
* Stock edges lower
(Adds details on PC market)
By Noel Randewich
SAN FRANCISCO, July 17 Top chipmaker Intel Corp
forecast weak current-quarter revenues, reinforcing
fears that a wavering global economy and a lack of consumer
interest are dampening personal computer sales.
Shaky economies in Europe and the United States and a
growing consumer preference for Apple Inc's iPad
tablets have been taking a toll on the PC industry.
The world's leading chipmaker cut its 2012 revenue growth
forecast to between 3 and 5 percent, down from a prior forecast
of "high single-digit growth". That put Intel's outlook in line
with many investors' recently reduced expectations and helped
cushion an initial sell-off of its stock.
"As macro events have transpired in the second quarter,
people looked at the original high single-digit guidance as
being stretched," said Craig Ellis, an analyst at Caris &
Company. "The Street would have been concerned had they stuck
with that guidance - but they didn't."
Fears that global PC sales may be worse than expected have
helped push Intel's shares down about 10 percent since the end
of April. They have recently traded around 10 times expected
Helping fuel fears of a PC slowdown, smaller Intel rival
Advanced Micro Devices last week slashed its outlook for
second-quarter revenue on disappointing sales in Europe and
China, where economic growth has recently lost some steam.
China and other emerging markets have been a key source of
growth in recent quarters, helping make up for weakness in the
Europe and the United States.
Doug Freedman, an analyst at RBC, said Intel's forecast for
the current quarter was less than typical for this time of year.
"Normal seasonal PC demand would show Q3 growth of at least
9 to 10 percent and Intel's guidance is comfortably below that,"
Intel supplies processors for 80 percent of the world's PCs
but it has yet to make significant progress in fast-growing
tablets or smartphones, products that use chips based on
technology from British-based ARM Holdings.
Intel is heavily promoting a new category of "ultrabook"
laptops with premium features like solid-state drives that it
hopes will add some zest to a PC market that some see as
lackluster compared to tablets and smartphones.
Many analysts are concerned the touch screens and other
high-end features on upcoming ultrabooks, made by Dell Inc
, Asus, Hewlett-Packard Co and others
will make them too expensive for some consumers.
Short-term PC sales may suffer as some consumers consider
putting off new purchases until Microsoft launches its new
Windows 8 operating system, expected in October.
Intel said revenue in the second quarter was $13.5 billion,
up from $13.03 billion in the year-ago period and lower than the
$13.56 billion expected.
Intel said revenue in the current quarter would be $14.3
billion, plus or minus $500 million. Analysts on average had
expected $14.60 billion, according to Thomson Reuters I/B/E/S.
GAAP net income in the second quarter was $2.8 billion, down
from $2.95 billion in the year-ago period. GAAP earnings per
share were 54 cents. Analysts had expected 52 cents.
Intel said non-GAAP gross margins in the second quarter were
64 percent. Intel maintained its full-year gross margin
forecast of 64 percent.
Shares of Intel fell 1.5 percent in extended trading before
paring losses. It had ended about 1 percent higher at $25.38 on
(Reporting By Noel Randewich, additonal reporting by Alistair
Barr; Editing by Richard Chang)