Struggling Intel Cutting Earnings Forecast, Hiring Tablet Experts

redOrbit Staff & Wire Reports – Your Universe Online

With the demand for personal computers on the decline, Intel warned investors Friday that they were lowering their third-quarter sales and profit margin forecasts while stepping up efforts to expand into the tablet computer market, various media outlets have reported.

The Santa Clara, California-based chip maker said that it expects the current quarter’s revenue to be between $12.9 billion and $13.5 billion, down from previous estimates of $13.8 billion to $14.8 billion, CNNMoney’s David Goldman reported on Friday.

Blaming “a weakening global economy for slumping chip sales… Intel said corporations are ordering fewer PCs, consumers in emerging markets are sitting on the sidelines, and PC manufacturers are reducing their inventories to meet sinking demand,” Goldman said. As a result, they expect gross profit margins to be between 61% and 63%, while previous forecasts had said that they might be as high as 65%.

Specifically, Intel said that weak demand in China and other areas that had been seeing economic growth contributed to the reduced forecasts, Quentin Hardy of the New York Times noted. However, they did advise that the demand for chips in data centers — machines that power cloud-computing servers to which mobile devices connect — was still “strong,” Hardy said.

“What Intel sells to manufacturers like Hewlett-Packard and Dell in the third quarter of the year typically ends up on store shelves and office loading docks in the fourth quarter, inside desktop PCs, laptops, and computer servers in data centers,” the New York Times reporter added. “If Intel feels pain now, it could signal that PC manufacturers are lowering their expectations for the holiday shopping season or are noticing that their business customers have become cautious.”

Also on Friday, and likely related to the forecast reduction announcement, came reports that the company had placed an advertisement that they were recruiting technology experts specializing in tablet computing.

That ad, posted Thursday on the social network LinkedIn, said that the firm was looking for members of “a new software team focused on tablets,” as well as individuals “to fill several senior positions… which will have responsibility for technology architecture as well as marketing and dealing with suppliers and customers,” Noel Randewich of Reuters reported.

“Intel spokeswoman Kathy Gill said Intel is constantly hiring and that the jobs advertised this week would expand Intel’s existing bench of tablet software experts,” Randewich added. “The company says in the ad it was looking for people with several years experience in Windows, wireless, and cameras.”