Intel revenue forecast beats, but stock falls
By Noel Randewich
(Reuters) - Top chipmaker Intel Corp forecast revenue above expectations, as demand for personal computers remained resilient in the face of consumers' growing preference for tablets and other mobile gadgets.
But investors, accustomed to Intel's beating forecasts, sold the company's stock, which had rallied 17 percent this year, following the news.
Shaky economies in Europe and the United States, a growing consumer preference for tablets, and a recent shortage of hard drives due to flooding in Thailand have taken a toll on the PC industry.
Still, demand in China and other emerging economies has helped sustain PC growth, and Intel's server business has been a winner from the buildout of servers behind the Internet and data consumed on smartphones.
"Given the topline is slightly better than expected, it doesn't seem like there's a meaningful impact from tablets right now. The PC market is holding up pretty well," said Srini Pajjuri, an analyst at CLSA.
Despite weakness in the United States, global PC shipments in the first quarter grew 1.9 percent from the year-ago period, research firm Gartner said last week. That was better than the firm's previous forecast of a 1.2 percent decline.
Hoping to safeguard its position in PCs, Intel is heavily promoting a new class of instant-on, super-thin laptops dubbed "ultrabooks" that it hopes can stand up to the likes of Apple Inc's Macbook Air, with some of the technological chic the iPad and other tablets epitomize.
An upcoming launch of Intel's newest PC processor, called Ivy Bridge, is expected to boost the company's sales later this year, as is the launch of Microsoft Corp's Windows 8 operating system later in 2012. Continued...