Intel Corporation, the world’s largest computer processor manufacturer, announced poor second-quarter sales and earnings estimates, indicating a general decline in demand for its processors.
In the second quarter, earnings will be 70 cents per share with revenue of around $18 billion, falling short of analysts’ expectations. The gross margin, which is the percentage of revenue that remains after deducting manufacturing expenses, would be 51%.
Scarcity is a setback in Gelsinger’s ambitious revival plans
The company’s announcement comes amid mounting fears that after a pandemic-related work-from-home boom, global demand for consumer PCs, Intel’s largest revenue source, is dwindling.
This threatens to undermine investor trust in Intel CEO Pat Gelsinger’s assertions that the business is gaining market share and restarting higher profit growth, reversing the company’s previous tendencies.
Investors have praised the CEO’s ambitious intentions to re-establish Intel’s competitiveness in products and manufacturing technologies after past CEOs’ delays and poor judgments enabled competitors to catch up and overtake him.
After closing at $46.84 a share in New York trade, Intel shares slid almost 4% in extended trading. After two years of underperformance, the stock is down 9% this year, with fewer holdings lost than semiconductor stocks overall.