Investors don’t seem to totally buy Intel Corp.’s proclamation that slumping personal computer sales have “bottomed out.”
The chip maker posted first-quarter profit Tuesday of $647 million, or 11 cents per share, that sailed past Wall Street’s estimates. Analysts polled by Thomson Reuters were expecting 3 cents per share. Sales of $7.1 billion also beat forecasts, even though both sales and profit were way down over last year, 26 percent and 55 percent, respectively.
The problem was sketchy guidance, which stirred fears that the tech turnaround Intel sees might not happen as fast as some investors hope.
Intel’s stock fell 77 cents, or 4.8 percent, to $15.24 in morning trading Wednesday. The earnings results were released after the stock market closed Tuesday.
Intel is predicting that revenue will stay flat from the first to second quarter. That’s roughly in line with the $7.01 billion analysts were expecting for the April-June period.
Some analysts said they were impressed with the prediction, considering the troubled state of the economy and the fact that the first and second quarters are typically the roughest for chip makers. Back-to-school and holidays are usually boom times.
“This is an unseasonably strong result that they’re guiding to, and I think people need to use that as the backdrop,” said Doug Freedman, an analyst with Broadpoint.AmTech.
But some investors seemed unnerved that Intel wouldn’t give more specifics. Intel said it wouldn’t give a detailed revenue forecast because it’s still too hard to accurately predict results in this environment.
One unknown is whether people are buying significantly more PCs, or whether Intel is mainly benefiting from computer makers replenishing their chip inventories, which had been whittled to low levels to save cash.
“The strength of end demand is not clear,” Intel’s chief financial officer, Stacy Smith, said in an interview.
In a broad sense, Intel’s outlook was relatively upbeat,…