Intel Corp. warned Friday that first-quarter revenue would miss estimates on weaker-than-expected demand and "slight" market share loss to rival Advanced Micro Devices Inc.
The Santa Clara, Calif., company pegged quarterly revenue at between $8.7 billion and $9.1 billion, compared with a prior range of $9.1 billion to $9.7 billion. Analysts surveyed by Thomson Financial forecast, on average, revenue of $9.42 billion.
Intel also said it expects gross profit margins to be squeezed by the lower revenue. Expenses also will be lower than forecast, however, due to lower revenue and profit-related spending.
AMD is still a distant No. 2 to Intel in the chips that act as the brains of computers. But the company beat Intel to market with some innovations that appear to be paying off, including chips for desktop and laptop computers that crunch 64 bits of data at a time rather than 32 bits.
In the fourth quarter, AMD's revenue jumped 45% to $1.84 billion, a sharp contrast to disappointing results from Intel, whose sales rose 6% to $10.2 billion in the period. Intel blamed slowing sales of desktop computers that use its chips and some market share losses for its weak fourth-quarter.
Shares of Intel fell 3%, or 61 cents, to $19.87 in morning trading Friday on the Nasdaq Stock Market, while AMD climbed 67 cents, or 1.6%, to $42.
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