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Intel Narrows Range of Revenue Outlook

By Reuters
Published | Updated

SAN FRANCISCO – Intel Corp (INTC), the world's largest microchip maker, on Thursday narrowed the range of its quarterly revenue forecast but left the midpoint unchanged, saying business remained within expectations.

Shares of the company fell just under 1 percent in after-hours trading following the scheduled update, which came amid stronger-than-expected forecasts from two other large U.S. chip makers.

Intel said it expects third-quarter revenue to be in the range of $9.8 billion to $10 billion, tightening a forecast it issued in July calling for revenue of $9.6 billion to $10.2 billion.

The midpoint of the forecast remained $9.9 billion, up about 16 percent from the $8.5 billion reported in last year's third quarter.

"The company continues to see double-digit year-over-year growth driven primarily by strong demand for notebook PC platforms," the Santa Clara, Calif.-based company said in a statement.

Intel also said it expects to pay an additional $225 million to $275 million in taxes during the quarter related to the potential repatriation of about $6.3 billion of accumulated income earned abroad. It added that its tax rate target for the fourth quarter had not changed.

Intel said it now expected gross profit margin to be slightly above 60 percent, but within a range of 59 percent to 61 percent. Previously, the company had targeted a gross margin of 60 percent, plus or minus a couple of points.

Intel shares fell after-hours to $25.86 on Inet, from a closing price of $26.09 on Nasdaq.

The news came the same day as another bellwether chip maker, Texas Instruments Inc. (TXN), raised its financial targets for the current quarter, citing broad-based demand. TI is the world's top maker of semiconductors used in mobile phones.

Also on Thursday, National Semiconductor Corp. (NSM), a maker of analog chips used in cellular phones and other electronics, reported quarterly results that handily topped expectations and forecast revenue well above what Wall Street had been expecting.