Intel has cut its revenue growth forecast for its highly profitable business of making chips for data centres as businesses reduce spending due to weak macroeconomic growth.
The world's biggest chipmaker has been counting on the data centre business to help offset declining demand for its chips used in personal computers, its biggest revenue generator.
The company agreed in June to acquire Altera for $16.7 billion to expand its line-up of the higher-margin chips used in data centres.
Intel said last night it expected the data centre business to grow in "low double digits" in 2015, compared with its earlier forecast of about 15% growth.
The business, the company's second biggest, had grown by 19.2% in the first quarter, 9.7% in the second and 12% in the latest quarter.
The company was not "rethinking the long-term growth" of the business, Intel's chief executive Brian Krzanich said on a post-earnings conference call.
The weak data centre forecast took the shine away from the company's better-than-expected profit and revenue in the third quarter.
The company also trimmed its 2015 capital expenditure for the third time to $7.3 billion, plus or minus $500m. Intel had previously forecast capital expenditure of $7.7 billion, plus or minus $500m.
The said last night that it now expected fourth-quarter revenue of $14.8 billion, plus or minus $500m. Analysts on average were expecting revenue of $14.83 billion, according to Thomson Reuters I/B/E/S.
Intel said revenue from its PC business fell 7.5% to $8.51 billion in the third quarter ended September 26.
Worldwide shipments of personal computers fell 7.7% in the third quarter, according to research firm Gartner.
Intel's net income fell to $3.11 billion, or 64 cents per share, from $3.32 billion, or 66 cents per share, a year earlier. Analysts on average had expected a profit of 59 cents per share.
Net revenue declined to $14.47 billion from $14.55 billion, but beat analysts' estimate of $14.22 billion.
