SAN FRANCISCO -- The PC market's drubbing from waves of tablet buyers is taking a toll on Silicon Valley chipmaker Intel.
on Tuesday reported that third-quarter net income fell 14% from a year
ago. The chipmaker also gave Wall Street a disappointing revenue
forecast for its current quarter.
Shares of Intel fell 3.6% to $21.54 in after-hours trading.
PC market is really slowing down at the moment," says Gartner analyst
Mikako Kitagawa. "Tablets are still really in the early phase of their
Shipments of personal computers, many of which
run on Intel chips, declined 8.8% in the third quarter compared with a
year ago, according to Gartner. Tablets shipments are up 119% in 2012,
Third-quarter net income was $2.97 billion, or 58
cents per share, down from $3.47 billion, or 65 cents per share, a year
ago. Intel blames tough economic conditions, but analysts believe a
shift in spending from PCs to tablets and smartphones may be
contributing. Global shipments of personal computers in 2012 are
predicted to decline for the first time in 11 years, according to a
recent report from industry tracker IHS iSuppli.
Still, Intel beat
expectations for the quarter. Analysts polled by FactSet expected
profit of 50 cents per share. Revenue fell 5.5% to $13.5 billion.
Analysts had expected $13.22 billion.
The Santa Clara, Calif.,
chipmaker says it expects about $13.6 billion in fourth-quarter revenue,
below the analysts forecast of $13.7 billion.
Meawhile, IBM -
which exited the personal computer business years ago - reported flat
earnings and revenue that declined 5% from a year ago.
services giant earned $3.8 billion, or $3.33 per share, in the
July-September period. The company delivered the same net income a year
ago, but its per-share earnings were 14 cents lower in the 2011 quarter
because the company then had more outstanding stock.
If not for
the costs of past acquisitions and retirement charges, IBM said it would
have earned $3.62 per share. On that basis, IBM exceeded expectations.
Revenue for the quarter was $24.7 billion compared with $26.2
billion a year earlier. Analysts, on average, had projected revenue of
IBM shares fell 3.4% to $203.80 in after-hours trading.