Intel's results beat estimates; forecast disappoints

Tue Oct 18, 2016 6:42pm EDT
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By Rishika Sadam and Nayyar Rasheed

(Reuters) - Intel Corp (INTC.O: Quote) reported better-than-expected quarterly earnings and revenue, boosted by improving PC demand and growth in its data center and cloud businesses, but its revenue forecast for the current quarter disappointed Wall Street.

The world's largest chipmaker's shares were down 5.3 percent at $35.75 in after-hours trading on Tuesday.

Intel said it expects fourth-quarter revenue of $15.7 billion, plus or minus $500 million. Analysts on average were expecting $15.86 billion, according to Thomson Reuters I/B/E/S.

"This is below the average seasonal increase for the fourth quarter as we expect the worldwide PC supply chain to reduce their inventory," Executive Vice President Stacy Smith said on a conference call with analysts.

Last month, Intel raised its third-quarter revenue forecast for the first time in more than two years, citing improving PC demand.

The company's decision to raise third-quarter forecast moved investors' expectations to a higher level, Stifel Nicolaus analyst Kevin Cassidy said.

Revenue from the data center business, which offers storage and cloud-based software services, rose 9.7 percent to $4.54 billion in the third quarter, from a year earlier.

Revenue growth from this unit for the full year will likely be in the high single digits, Intel Chief Executive Brian Krzanich said on the call.   Continued...

The logo of Intel, the world's largest chipmaker is seen at their offices in Jerusalem, April 20, 2016. REUTERS/Ronen Zvulun/File Photo