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January 18, 2006

Intel earnings disappoint too

Posted by David Hunter at 10:11 AM ET.

It’s not just Yahoo that’s causing angst on Wall Street. Alexei Oreskovic at The

Four months of strength in shares of Intel looked likely to end Wednesday as Wall Street threw up its hands over the company’s quarterly earnings report.

Intel shares were poised to swoon as downgrades poured in. Citigroup downgraded the stock to hold on concerns about the chipmaker’s near-term profitability and ability to estimate reseller inventories. UBS and Piper Jaffray did the same, citing the potential for weakening growth and gross margins.

Intel said Tuesday that fourth-quarter earnings rose 16% to $2.45 billion, or 40 cents a share, missing estimates by 3 cents due to a shortfall in sales of microprocessors for desktop computers. Fourth-quarter sales rose 6% to $10.2 billion, well below the company’s previous estimate of $10.4 billion to $10.6 billion and the Wall Street consensus estimate of $10.56 billion.

The outlook for 2006 is equally bleak, with Intel projecting that annual growth will dip into single-digit territory for the first time in three years.

The desktop computer problems were twofold in that sales slowed in Asia while availability was also limited by Intel reliance on 3rd party chipset manufacturers who were unable to deliver. The portable and server markets are doing rather better.

Filed under Financial, General Business, Hardware, Intel

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One Response to “Intel earnings disappoint too”

  1. Microsoft News Tracker » AMD wows Wall Street Says:

    [...] We mentioned Intel’s disappointing earnings on Wednesday. Filed under Hardware, General Business, Financial, AMD Listen to this article   [Permalink] [...]

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