(Bloomberg) -- Intel Corp., the largest US chipmaker, gave a quarterly revenue forecast that widely missed analysts’ estimates, conceding that a slump in computer demand is dragging on longer than anticipated.
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Fourth-quarter revenue will be about $14 billion to $15 billion, the company said in a statement late Thursday, compared with analyst estimates for $16.3 billion. Profit, excluding certain items, will be 20 cents a share, below the average prediction of 66 cents.
While the downturn persists, the company pledged to step up its already-aggressive cost-reduction efforts, sending the shares higher in extended trading. Chief Executive Officer Pat Gelsinger needs a rapid rebound in demand to help fund his ambitious plans to restore the company to its former dominance in the $580 billion semiconductor industry. Three months ago, when he slashed billions off Intel’s annual sales projections, the executive promised investors that the third quarter would be the bottom for the market. That prediction now looks premature.
Third-quarter net income was $1 billion, or 25 cents a share, down from $6.8 billion, or $1.67 a share, in the same period a year ago. Revenue dropped 20% to $15.3 billion. Before certain items, profit was 59 cents a share. On that basis, the company’s performance fell short of analysts predictions. Wall Street was looking for a profit of 33 cents on sales of $15.4 billion.
Intel shares initially fell, then rose about 7% in late trading following the announcement, after earlier closing at $26.27. The stock has plummeted 49% this year.
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