Despite PC 'Stabilization' Intel Shares Trend Down On Tepid Outlook

Posted: Jan 16 2014, 4:36pm CST | by


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Despite PC 'Stabilization' Intel Shares Trend Down On Tepid Outlook
Photo Credit: Forbes

Desktop computers still make up a large portion of chip maker Intel's business, but PC sales have been declining sharply in recent years as tablets, smartphones and laptops become increasingly popular. In a statement on the earnings today, CEO Brian Krzanich noted that the company saw “stabilization in the PC segment.”

Nevertheless investors aren’t thrilled. Shares, which closed at $26.54 Thursday, trended down about 3% in after hours trading following the release.

The company reported full-year net income of $9.6 billion or $1.89 per share. While per share earnings were in line with the Street’s consensus estimate, net income was slightly below expectations. At $52.7 billion, revenue was slightly above what analysts expected.

For the fourth quarter, Intel’s revenue and net income came in just below Wall Street expectations at $13.8 billion and $2.6 billion respectively. At 51 cents, earnings per share were a penny short of consensus.

For the full year the PC group brought in $33 billion in revenue, down 4% from 2012. Data centers, the company’s second largest segment, brought in 7% more than in 2012 at $11.2 billion in revenue. Combined other segments brought in  $4.1 billion, also down 7%. The reported fourth quarter 5.6% decline in shipments was the smallest fall in six quarters.

While results for 2013 weren’t too far from expectations, the look ahead may be what is pushing Intel shares lower. For the first quarter 2014 Intel forecasts revenue of $12.8 billion, give or take $500 million. For the full year the company expects revenue to be flat.

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Source: Forbes

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