SAN FRANCISCO – Intel Corp. (INTC) reported a higher quarterly profit and revenue Tuesday, but its stock fell 4 percent after it cut its profit margin forecasts for the year as it sells a larger mix of less profitable products.
The world's largest chip maker reported a profit of $1.8 billion, or 27 cents a share for the second-quarter quarter that ended June 26, compared with a year-earlier profit of $896 million, or 14 cents a share. Revenue rose to $8.05 billion from $6.82 billion in the same period last year.
The Santa Clara, Calif.-based company also lowered its forecast for gross profit margin for the year to around 60 percent from 62 percent, citing faster growth of less profitable products. The company also said its inventory levels grew by $427 million in the quarter.
Intel's comments on profit margins for the year were to be expected, as Intel ships more lower-margin products to support a refreshed line of microprocessors, said Krishna Shankar, an analyst with JMP Securities,
"I think part of this is faster growth in things like flash memory, chipsets and motherboards," Shankar said.
Analysts on average were expecting a profit of 27 cents a share on revenue of $8.11 billion, according to a survey by Reuters Estimates.
Intel also said it expected third-quarter revenue in the range of $8.6 billion to $9.2 billion, in line with analyst estimates of $8.77 billion, as measured by Reuters Estimates.