Stefan Mileschin

Predicts profit slow down

Intel forecast current quarter revenue and profit below what the cocaine nose-jobs of Wall Street anticipated.

Intel said that it had missed fourth quarter sales estimates thanks to the fact that China is not buying its chips and no one wants its data centre and modem chips other than Apple and it insisted that they had enough sweeteners in the contract to kill a diabetic elephant.

The company’s shares fell 6.7 percent in extended trading as the news further stoked fears of an industry slowdown after sales warnings from Apple, Samsung Electronics, and Taiwan Semiconductor earlier this month pointed to stagnating smartphone demand and a cooling Chinese economy.

Those fears had lifted briefly earlier this week with better than expected quarterly results from Texas Instruments, Xilinx and Lam Research. But after Intel’s report on Thursday, shares of smaller rival AMD which reports results next Tuesday and Nvidia fell.

Intel said weaker demand from China hurt the company’s data centre chip business, which has driven growth in recent years as PC sales have slowed and cloud-based services have become more popular.

In an interview, Intel Interim Chief Executive Bob Swan said data centre providers tend to make large purchases in spurts and then spend time “digesting” the chips as they build out their centres.

Sales in China fell because some buyers there - especially cloud computing vendors - seem to have bought chips earlier than usual last year because of fears about U.S.-China trade tensions, Swan said. US cloud computing vendors continued their usual buying patterns throughout the year, he added.

“I do believe there was earlier buying [among Chinese cloud customers] for server-type products in the course of the second and third quarter of last year”, Swan said. “But overall I would say ... the prospects and the health of the industry are as bright as they’ve ever been. We’re just in a digesting period.”

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