Intel, the world's biggest chip maker, said today that first-quarter revenue is expected to be below the company's previous expectations. The company's stock price has fallen $1.18 a share, or 3.65 percent, to $31.14. That's a loss of more than $5 billion in market value.
The company is a bellwether for the PC industry and all things electronic. Intel now expects first-quarter revenue to be $12.8 billion, plus or minus $300 million, compared to the previous expectation of $13.7 billion, plus or minus $500 million.
Intel said that the change in outlook is a result of weaker than expected demand for business desktop PCs and lower than expected inventory levels across the PC supply chain. Intel said it believes the "changes to demand and inventory patterns are caused by lower than expected Windows XP refresh in small and medium business and increasingly challenging macroeconomic and currency conditions, particularly in Europe."
Meanwhile, data center chip sales are meeting expectations. Intel is forecasting that its gross profit margin range will remain at 60 percent, plus or minus a couple of percentage points, as lower PC sales are offset by higher platform average selling prices. The company will report earnings on April 14.