This Chart Shows What Intel’s 7% Guidance Cut Looks Like

(Photo Credit: Nick Knupffer)

This morning Intel (INTC) warned that lower than expected demand for enterprise PCs will cause disappointing first quarter revenues. Company stock was down roughly 5% on the news.

Intel lowered its sales outlook from $13.7 billion plus or minus $500 million to $12.8 billion plus or minus $300 million. Prior to the announcement Wall Street had expected Intel to hit the middle of its initial guidance range while the crowd at Estimize was looking for a very minor beat at $13.8 billion. The following chart shows how the lowered guidance stacks up against existing estimates and recent quarters.

(WS and Estimize estimates were in-line with guidance before today’s warning)

New guidance projects that Intel’s first quarter revenue will settle in-line with results from last year. Before the announcement Estimize and Wall Street were predicting a gain of over 7%. Given the buzz around the stock and the 25% gains that it’s banked in the past 365 days, these numbers are disconcerting. Shares of Intel peaked in December and have plummeted 19% since. 

Demand for business PCs perked up last year, which gave Intel an unexpected lift. In today’s press release the company mentioned that enterprise desktop demand was soft, which is a segment that Intel still relies heavily upon.

Intel specifically blamed dampened demand for Windows XP upgrades from small and medium sized businesses for the weakness. Intel said this may be a result of challenging macroeconomic conditions, particularly currency worries in Europe.

Shares of Microsoft (MSFT) dipped 2% today.