(Reuters) – Chipmaker Intel Corp INTC.O forecast current-quarter revenue below analysts’ estimates and cut full-year outlook on Thursday, sending its shares down 7 percent and sparking worries that an industry-wide slowdown could persist until the end of 2019.
The company cut its 2019 revenue forecast to $69 billion (53.5 billion pounds), from the $71.5 billion it told investors to expect when it last reported earnings in January.
The Santa Clara, California-based chipmaker said it expects revenue and profit of $15.6 billion and 89 cents per share for its second quarter that ends in June, compared with analysts’ expectation of $16.85 billion and $1.01 per share.
Chipmakers are struggling with a decline in demand due to a slowing Chinese economy and as manufacturers face repercussions of ongoing trade disputes.
Revenue from Intel’s higher-margin data center business fell 6.3 percent to $4.90 billion in the first quarter, hurt by weakness in China market and inventory correction. Analysts were expecting revenue of $5.10 billion, according to financial and data analytics firm FactSet.
Intel, Apple Inc’s sole iPhone chip supplier for the past year, last week said it was exiting the 5G smartphone modem business hours after Apple and Qualcomm Inc settled their royalty dispute.
Revenue in Intel’s client computing business, which caters to PC makers and still the biggest contributor to sales, rose 4.45 percent to $8.59 billion, beating FactSet estimates of $8.38 billion.
Shares were trading at $53.75 in trading after the bell.
(Reporting by Sayanti Chakraborty in Bengaluru; Editing by Sriraj Kalluvila)