Chipmaker Intel forecast current-quarter revenue below analysts' estimates and cut full-year outlook on Thursday, sparking worries that an industry-wide slowdown could persist until the end of 2019, sending shares down 7 per cent.
The California-based chipmaker with a major manufacturing facility in Leixlip, Co Kildare, cut its 2019 revenue forecast to $69 billion (€62 billion), from the $71.5 billion it told investors to expect when it last reported earnings in January.
Chipmakers are struggling with a decline in demand due to a slowing Chinese economy and as manufacturers face repercussions of ongoing trade disputes. Revenue from Intel's higher-margin data centre business fell 6.3 per cent to $4.9 billion in the first quarter, hurt by weakness in the China market and inventory correction. Analysts were expecting revenue of $5.10 billion, according to financial and data analytics firm FactSet.
Intel, Apple Inc's sole iPhone chip supplier for the past year, last week said it was exiting the 5G smartphone modem business hours after Apple and Qualcomm Inc settled their royalty dispute. Revenue in Intel's client computing business, which caters to PC makers and still the biggest contributor to sales, rose 4.45 per cent to $8.59 billion, beating FactSet estimates of $8.38 billion. Shares were trading at $53.75 in trading after the bell.
Better news
There was better news from Amazon, where first-quarter profit estimates trounced estimates due to soaring demand for its cloud and advertising services. However, it forecast second-quarter revenue largely below expectations. Net sales rose 17 per cent to $59.70 billion, beating the analysts' average estimate of $59.65 billion. The company forecast net sales of between $59.5 billion and $63.50 billion for the second quarter, the midpoint of which was below analysts' average estimate of $62.37 billion, according to IBES data from Refinitiv.
Amazon's net income rose to $3.56 billion in the first quarter ended March 31st, from $1.63 billion, sending its shares up 1.2 per cent after the bell. Net sales in North America, its biggest market, jumped 17 per cent to $35.81 billion in the quarter.
Amazon Web Services revenue surged 41.4 per cent to $7.70 billion, but missed the estimate of $7.72 billion.
Amazon's operating expenses rose 12.6 per cent in the quarter to $55.28 billion as it invested in electric-car maker Rivian and self-driving car startup Aurora and continued spending on its Prime programme, grocery delivery from Whole Foods stores and original video content.
Amazon has also been gaining immensely from its highly profitable ad sales business. The company said revenue from the category and some other items grew 33.7 per cent to $2.72 billion, but missed estimates of $2.85 billion. – Reuters
