Intel Earnings Beat, but Outlook Is Light

Intel reported quarterly earnings and revenue that beat Wall Street's forecast but its outlook came in light as the personal computer industry wrestles with a shaky global economy and a shift by consumers toward tablets.

Intel Earnings Beat, but Outlook Is Light

With economic growth slowing in China and struggling in Europe and the United States, global PC shipments are expected by analysts to decline slightly this year, the first annual drop since 2001.

After the earnings announcement, the technology company's shares fell more than 2 percent in extended-hours trading. (Click here to get the latest quotes for Intel.)

Intel said it expects fourth-quarter revenue of $13.1 billion to $14.1 billion. The midpoint of this range was lower than analysts' estimates of $13.74 billion.

"Our third-quarter results reflected a continuing tough economic environment, " Intel President and CEO Paul Otellini said in a statement.

For the third quarter, Intel reported earnings according to generally accepted accounting principles of 58 cents per share, down from 65 cents per share last year.

Revenue dropped 5 percent to $13.5 billion from $14.23 billion a year ago.

Analysts had expected Intel to report comparable earnings of 49 cents a share on $13.23 billion in revenue, according to the latest data from Thomson Reuters.

Following the release, JMP Securities analyst Alex Gauna told CNBC, "I don't think (the results) answer any of the longer-term questions about the company … Intel still has a lot to prove in terms of how it can compete in this new era of mobility."

Intel said fourth-quarter gross margins would be 57 percent, or 58 percent non-GAAP, both plus or minus a couple of percentage points.

Wall Street had expected Intel to deliver gross margins of closer to 62 percent on average in the holiday quarter. Some warn that the chipmaker may find it tough to shore up its profitability as tablet computers continue to lure buyers away.

Correction: An earlier version of this story said the 58 cents a share Intel reported was excluding items. In fact, 58 cents was the GAAP number, which includes items. Excluding items, the company reported earnings of 60 cents a share. Analysts look at the GAAP number.