Intel Corp’s third quarter figures were thrown off course by inventory adjustments at customers and lower than expected PC demand, the chip giant admitted.
Intel originally expected third quarter revenues of $8.6 billion to $9.2 billion, with gross margin of 60%, plus or minus a couple of points. However, it sent a chill through the industry in September, when it lowered revenues expectations to between $8.3 billion and $8.6 billion, with gross margin of 58% plus or minus a couple of points.
In the event, revenues came in at $8.5 billion, up 8.1% on the year. Operating income climbed 3% to $2.4 billion, while net income was up 15% to $1.9 billion. Gross margin was 55.7%.
The company said inventory adjustments and lower than expected PC demand had undermined its figures. More specifically, the Intel architecture group shipped more motherboards and chipsets and less CPUs than anticipated, hitting the revenue mix. At the same time, flash memory shipments – a mainstay of the vendor’s communications products group – were flat.
Intel set a downbeat forecast for the fourth quarter, saying revenues will be between $8.6 billion and $9.2 billion, with gross margin of approximately 56%, plus or minus a couple of points. Before yesterday’s announcement, analysts were expecting revenue of $9.07 billion, with the lowest expected figure being $8.77 billion.
For the year to date, revenues were up 15% to $24.6 billion, while net income so far stands at $5.4 billion, up 55.5%.