(Reuters) -Intel Corp lowered its full-year sales forecast and missed estimates for second-quarter results on Thursday as demand for its chips used in personal computers cools off from pandemic highs.
Shares of the Santa Clara, California-based company fell 10% in extended trade as the company also forecast current-quarter results well below expectations.
Runaway inflation and the reopening of offices and schools have led people to spend less on PCs than they did during lockdowns.
Chipmakers are also under pressure from a spate of COVID curbs in key PC market China and the Ukraine war that have worsened supply-chain snarls and dragged demand further. Global shipments of PCs are expected to drop 9.5% this year, according to IT research firm Gartner.
“This quarter’s results were below the standards we have set for the company and our shareholders… The sudden and rapid decline in economic activity was the largest driver, but the shortfall also reflects our own execution issues,” said Intel CEO Pat Gelsinger.
Intel now expects fiscal 2022 revenue between $65 billion and $68 billion, compared with its earlier forecast of $76 billion.
Intel, which draws about half of its revenue from selling the chips that power desktops and laptops, also forecast current quarter revenue in the range $15 billion to $16 billion, also lower than an average of estimates of $18.62 billion, according to Refinitiv.
For the reported quarter, sales at Intel’s Client Computing Group (CCG), which supplies PC makers and is the largest contributor to the company’s revenue, fell 25% to $7.7 billion in the reporting quarter. According to IT research firm Gartner, global shipments of PCs are expected to drop 9.5% this year.
Intel’s revenue dropped 22% to $15.3 billion – its seventh straight quarter of decline and were below expectations of $17.92 billion.
On an adjusted basis, the company earned 29 cents per share, missing expectation of 70 cents.
(Reporting by Yuvraj Malik in Bengaluru; Editing by Devika Syamnath and Diane Craft)