Intel Corp. said Tuesday that the weak global economy is slowing its growth, and revenue for the current quarter is likely to come in below Wall Street forecasts.
The company reported quarterly revenue of $13.5 billion, operating income of $3.8 billion, net income of $2.8 billion and EPS of $0.54. The company generated approximately $4.7 billion in cash from operations, paid dividends of $1.1 billion and used $1.1 billion to repurchase stock.
"The second quarter was highlighted by solid execution with continued strength in the data center and multiple product introductions in Ultrabooks and smartphones," said Paul Otellini, Intel president and CEO. "As we enter the third quarter, our growth will be slower than we anticipated due to a more challenging macroeconomic environment. With a rich mix of Ultrabook and Intel-based tablet and phone introductions in the second half, combined with the long-term investments we're making in our product and manufacturing areas, we are well positioned for this year and beyond."
Intel chips go into about 80 percent of personal computers and into vast numbers of servers as well.
For the full year, Intel now expects sale to grow 3 percent to 5 percent from last year, rather than the "high single digit" level it predicted earlier.
The first smartphones with Intel processors launched in the quarter in China, France and India.
When it comes to tablets, Intel is counting on Windows 8, due this fall. This touch-oriented update from Microsoft is designed to work well on tablets as well as PCs. Otellini said more than 20 Windows 8 tablet models are in the works at different manufacturers, based on low-power Intel chips.
In PCs, Intel's big push this year is in ultrabooks. It has embarked on its largest marketing campaign in years to support them. Ultrabooks are still relatively expensive, but Otellini said he expects prices to come down to $699 this fall.