Intel Warns of Revenue Shortfall Again
Intel warned investors Friday that it would miss its original revenue targets, making it the third consecutive quarter it has had to lower expectations for Wall Street. News of the miss sent the company's stock down almost five percent in late morning trading before rebounding late in the day.
The Santa Clara, Calif., chipmaker cited "weaker than expected demand and a slight market segment share loss" as a reason for the decline. Competitor AMD has been making inroads over the past few months, beating its larger rival to market with several new technologies, especially in 64-bit chips.
Revenue estimates were trimmed to $8.7 to $9.1 billion from $9.1 to $9.7 billion previously. Analysts have been slowly backing off their expectations, with Merrill Lynch saying the company's shipments are looking "surprisingly weak."
AMD has come on strong in recent months, surpassing Intel in the desktop market in terms of shipped chips back in October of last year. Intel still dominates the laptop market, but even there too AMD has seen some success.
Such success is causing some analysts to give pause on whether to recommend investing in Intel. "Investors will increasingly question Intel's franchise value until/unless their pricing strategy begins to slow down AMD's momentum," Goldman Sachs analyst James Covello was quoted by MarketWatch as saying in a research note to clients.
News of Intel's troubles didn't seem to faze Wall Street -- the Dow Jones Industrial Average surged over 11,100 by late afternoon.