Intel Corp. (INTC: Quote) said Wednesday after the markets closed that its second quarter profit fell 29% from last year, as revenue declined and gross margin shrank amid a slump in the PC market.
The company's quarterly earnings per share missed analysts' estimate by a penny and its quarterly revenue also fell short of analysts' forecast.
"In the second quarter, we delivered on our quarterly outlook and made several key product announcements," said Intel CEO Brian Krzanich, who took over the reins from Paul Otellini in May.
Intel shares are currently losing 3.11% in after hours trading after closing the day's regular trading session at $24.15, down 10 cents. The shares trade in a 52-week range of $19.23 to $26.90.
The world's biggest chipmaker reported net income for the second quarter of $2.00 billion or $0.39 per share, compared to $2.83 billion or $0.54 per share for the year-ago quarter.
On average, 41 analysts polled by Thomson Reuters expected the company to earn $0.40 per share for the second quarter.
Gross margin for the quarter shrank to 58.3% from 63.4% a year ago.
Santa Clara, California-based Intel said revenue for the second quarter fell 5.1% to $12.81 billion from $13.50 billion in the same quarter last year. Forty analysts analysts had a consensus revenue estimate of $12.90 billion for the second quarter.
PC client group revenue for the second quarter fell 7.5% year-over-year to $8.1 billion. This group caters to desktops, notebooks, and wireless connectivity products.
Intel is the world's largest supplier of microprocessors, the brains of personal computers, with roughly 80% of the global market share.
Earlier this month, industry research firm International Data Corp. said global PC shipments in the second quarter of 2013 fell 11.4% from last year to 75.6 million units.
Another market research first market research firm Gartner, Inc. (IT) also said worldwide PC shipments in the second quarter fell 10.9% from a year earlier to 76.0 million units. Gartner said "This marks the fifth consecutive quarter of declining shipments, which is the longest duration of decline in the PC market's history."
Data center group revenue for the quarter remained essentially flat with last year at $2.7 billion. This group caters to the server and storage markets.
Other Intel Architecture Group revenue for the quarter slipped 15% to $942 million. This group caters to the smartphone, tablet, netbook and mobile communication markets.
Software and services group revenue grew 4% to $610 million in the second quarter.
Looking forward, the company forecast third quarter revenue of $13.5 billion, plus or minus $500 million. Analysts currently expect the company to post revenue of $13.73 billion for the third quarter.
Gross margin for the third quarter is expected to be 61%, plus or minus a couple percentage points.
The company said it now expects full year 2013 revenue to be approximately flat year-on-year, compared to its prior expectations of low single digit percentage increase.
The company also cut its full year gross margin forecast to 59%, plus or minus a couple percentage points from its earlier forecast of 60%, plus or minus a few percentage points.
by RTT Staff Writer
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