Intel shares fell 4% in trading Thursday after the chip-maker cut its outlook for Q1 revenue, citing weaker-than-expected demand for business desktop PCs and lower-than-expected inventory levels across the PC supply chain.
Recently shares of Intel were down 4% or $1.30 to $31.02 on heavier than average volume of 49.4 million shares. Average daily volume is 29.4 million shares.
The company now expects Q1 revenue of $12.8 billion, plus or minus $300 million, compared with its previous guidance of $13.7 billion, plus or minus $500 million. Analysts’ latest mean forecast was $13.7 billion, according to Capital IQ.
“The company believes the changes to demand and inventory patterns are caused by lower-than-expected Windows XP refresh in small and medium business and increasingly challenging macroeconomic and currency conditions, particularly in Europe,” Intel said Thursday. The company noted its data-center business is meeting expectations.
Meanwhile, Intel expects the midpoint of its gross margin range to remain at 60%, plus or minus a couple of percentage points, as lower PC unit volume is offset by higher platform average selling prices. Analysts recently were forecasting a Q1 gross margin of 60.12%, on average.