| Intel Corp. posted fourth-quarter sales that missed analysts' estimates and gave a forecast that disappointed investors, prompting a 14 percent plunge in the shares on Tuesday and signaling that electronics demand is slipping.
The world's largest chipmaker said prices for memory used in music players trailed its projections, crimping total sales growth to 11 percent over the holiday season. First-quarter revenue will rise to as little as $9.4 billion, short of analysts' estimates of $10.1 billion.
The report fuels concern that technology spending is being hurt by an increase in customers' borrowing costs and slowing economic growth. Analysts including JPMorgan Securities Inc.'s Christopher Danely said Intel and Advanced Micro Devices Inc. may be making more chips than personal-computer makers need.
Intel has operations worldwide and employs 300 workers at its Riverton, Utah, location and approximately 1,800 in its Lehi-based joint venture with Micron Technology, IM Flash Technologies.
Intel's fourth-quarter net income increased 51 percent to $2.27 billion, or 38 cents a share, the company, based in Santa Clara, Calif., said Tuesday. Sales rose to $10.7 billion.
Intel dropped $3.14 to $19.55 in extended trading. The stock fell 39 cents, or 1.7 percent, to $22.69 at 4 p.m. New York time in Nasdaq Stock Market trading. Intel shares have declined 15 percent this year.'
Intel, whose sales are seen as an indicator of overall computer demand, kicked off the earnings season for U.S. technology companies. Intel said Tuesday that it wrote down the value of its flash-memory chip-making assets that will be part of a joint venture with STMicroelectronics NV, hurting profit.
Fourth-quarter sales missed the mid-point of Intel's forecast range by $88 million because revenue from another type of flash memory, called Nand, was hit by lower prices. The Lehi facility produces the Nand flash chips. Intel's Smith said revenue from computer chips met expectations.