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Intel downgrades full-year business outlook

Second quarter earnings down from last year

Intel warned Tuesday that it expects to see lower-than-anticipated growth for 2012. The news came as the company posted mixed results for the second quarter of the year.

The world's biggest chip maker said net profit for the three months to the end of June were US$2.8 billion, down 4 percent from the same period a year earlier. Revenues were $13.5 billion, up 3 percent from the second quarter of 2011.

"As we enter the third quarter, our growth will be slower than we anticipated due to a more challenging macroeconomic environment," said Paul Otellini, president and CEO of Intel, in a statement.

As a result, the company expects to record annual revenue growth of between 3 percent and 5 percent this year, down from the "high single digit" growth it had previously predicted.

Intel is expected to detail its forecast later Tuesday in a conference call with analysts.

Intel's lackluster results come against a general lack of consumer enthusiasm for desktop and laptop computers in preference to tablets and smartphones. Global PC sales reached 87.5 million units in the quarter, virtually unchanged from the same period a year ago, according to figures from IDC. The drop was steeper in established markets like the U.S., where PC shipments dropped 5.7 percent.

While Intel sells chips that go into both tablet PCs and smartphones, the chips are not as powerful and don't carry the same price tags and profit margins as Intel's faster PC processors. Intel is trying to rekindle interest in laptop PCs with the Ultrabook platform, a sleek, thin design intended to bring Macbook Air-type style to the Windows-PC sector, but the machines are still at an early stage.

Martyn Williams covers mobile telecoms, Silicon Valley and general technology breaking news for The IDG News Service. Follow Martyn on Twitter at @martyn_williams. Martyn's e-mail address is martyn_williams@idg.com


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