Intel pulls back PC market outlook

Intel's processors are used in 80 percent of the world's computers, nevertheless mobile devices from Apple Inc's iPad to Google Inc Android smartphones are eating into PC sales and Intel is struggling to gain a foothold in the fast-expanding mobile market.

The tepid forecast

The tepid forecast and lingering concerns about the second half overshadowed a solid quarter for the chip giant. Its quarterly results and revenue forecast both trumped Wall Street's expectations.

Gains in the second quarter were driven by the PC group, Intel's largest segment, and the data center group, which has been expanding quickly partly because of cloud computing.

Intel's upbeat results followed positive quarterly revenues from Apple and International Business Machines Corp before this week.

The company foresaw current-quarter revenue of about $14 billion, give or take $500 million, versus the $13.5 billion analysts expect on average.

Investors eyeing slow economies and red-hot sales of Apple's iPad 2 in recent months have insisted Intel's outlook for PC growth is overly optimistic. Analysts had warned that Intel at some point may be forced to trim its estimate.

Analysts on average had expected Intel's revenue to rise to $13.5 billion in the current quarter, according to Thomson Reuters I/B/E/S, less than normal growth for this time of year.

The June quarter

Revenue in the June quarter was $13.1 billion, up 22 percent over the year-ago period and above the $12.8 billion expected by analysts, according to Thomson Reuters I/B/E/S.