Intel lowered its revenue outlook for the first quarter and now expects to bring in about US$12.8 billion, down from its previous forecast of about $13.7 billion.
Intel attributed the nearly $1 billion downward revision to sluggish sales of business desktop PCs and lowered inventory levels across the PC supply chain. In particular, the "refresh rate" at which small and medium-size businesses are replacing Windows XP computers with newer ones has been slower than expected. Microsoft stopped supporting Windows XP last April.
Intel also cited "challenging" macroeconomic and currency conditions, particularly in Europe, for the revised outlook. Intel will update other financial expectations on April 14 when it reports first quarter earnings, but for now those prior expectations should be disregarded since they "have been withdrawn," the company said.
On the bright side, the company said its crucial data center business is meeting expectations.
The stock was down about 3% on the Nasdaq exchange shortly after 10 a.m. U.S. Eastern Time.