Intel jolts sector with lowered outlook

Intel Corp. stunned the tech sector Friday by sharply cutting its revenue outlook for the current quarter, citing weak demand for personal computers and slower growth from emerging economies. The world's largest chipmaker is being hit by a shift away from traditional PCs to mobile devices, and by a sluggish global economy. It also is hurt by consumers holding back on purchases ahead of the release in late October of the Windows 8 operating system. Intel said third-quarter revenue would be in the area of $13.2 billion, down from an earlier expectation of $13.8 billion to $14.8 billion "as a result of weaker than expected demand in a challenging macroeconomic environment." The company also lowered its profit margin forecast and withdrew its guidance for full-year results. Shares of the California tech giant fell 2.8 percent to $24.40 in morning trade. Analyst Vijay Rakesh at Sterne Agee said Intel is seeing "multiple challenges in the PC space," with slower-than-expected sales of the so-called ultrabooks and tougher pricing for other computers. Rakesh said this environment also suggests "headwinds for the rest of the PC peers" including Advanced Micro Devices, down 4.1 percent Friday, and Nvidia, down 3.8 percent "Intel is in a bind," said Paul Ausick at 24/7 Wall Street. "The company's chip customers are not selling as many PCs or servers as they had expected, and Intel's lack of a real competitive product in the fast-growing mobile market is continuing to take its toll." Intel is to release its earnings October 16.