Chip giant Intel has revealed a four percent drop in profit for its second quarter and downgraded its forecast for the 2012 financial year ahead of shrinking consumer demand for personal computers.
Intel’s second quarter 2012 results, released today, show net income dropped to $US2.83 billion, compared to $US2.95 billion from the same period in 2011.
Despite beating analysts' Q2 expectations, Intel has cut its outlook for Q3 and the 2012 financial year based on slow growth and low retail demand for products using its processors.
Intel CEO Paul Otellini said the company's second quarter results were spurred by the introduction of new ultrabook and smartphone products, as well as continued growth in servers.
"As we enter the third quarter, our growth will be slower than we anticipated due to a more challenging macroeconomic environment,” he said.
“With a rich mix of ultrabook and Intel-based tablet and phone introductions in the second half, combined with the long-term investments we're making in our product and manufacturing areas, we are well positioned for this year and beyond."
Intel predicted revenue growth for 2012 of between three and five percent, down from previously expected “high single digit” growth.
Intel’s 2011 full year revenue came in at $US54 billion, up 24 percent on the previous year, and net income was reported at $US12.9 billion, up 13 percent on 2010.
Otellini said the rise of mobile devices like smartphones and tablets had impacted the demand for traditional computers, reports The New York Times.
He said Intel was betting on growth in its ultrabook category to reinvigorate customer demand.
Over 140 new designs will launch later this year, Otellini revealed, with more than 40 to carry touch-screen displays in the same vein as Apple’s iPad and iPhone devices.
Intel’s main rival AMD will announce its second quarter results on Thursday. It has predicted an 11 percent drop in revenue from last year, similarly citing lacklustre consumer demand.
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