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BREAKING NEWS

Intel forecasts first-quarter below estimates, shares fall

Intel forecasts first-quarter below estimates, shares fall
FILE PHOTO: The Intel logo is shown at E3, the world's largest video game industry convention in Los Angeles, California, U.S. June 12, 2018. REUTERS/Mike Blake/File Photo -
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Mike Blake(Reuters)
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(Reuters) - Intel Corp forecast current-quarter revenue and profit below analysts' estimates and missed on fourth-quarter revenue expectations on Thursday, as a slowdown in China hit demand for its data centre chips.

The company's shares fell 7.7 percent in extended trading and also undid part of a chip stock rally earlier in the day due to better-than-feared quarterly results from a clutch of chipmakers such as Texas Instruments Inc, Xilinx Inc and Lam Research Corp.

Intel forecast first-quarter revenue of $16 billion (£12 billion) and adjusted earnings of 87 cents per share.

Analysts on average were expecting revenue of $17.35 billion and a profit of $1.01 per share, according to IBES data from Refinitiv.

Intel has turned to the server chips it supplies data centre operators for growth in recent years. However, fourth-quarter revenue in that higher-margin business came in at $6.07 billion, below expectations of $6.35 billion, according to financial and data analytics firm FactSet.

The company said data centre missed expectations "on softer China demand" and "cloud deceleration".

Intel reported net income of $5.20 billion, or $1.12 per share, for the fourth-quarter ended Dec. 29, compared with a loss of $687 million, or 15 cents per share, a year earlier. (https://bit.ly/2FN4ac0)

Net revenue rose to $18.66 billion from $17.05 billion, but missed estimates of $19.01 billion.

Excluding items, the company earned $1.28 per share, above expectations of $1.22.

(Reporting by Sonam Rai in Bengaluru and and Stephen Nellis in San Francisco; Editing by Sriraj Kalluvila)

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