Intel slid in late trading after giving a dire forecast for the current period, hurt by sinking demand from PC customers and tough competition in the lucrative market for server hardware.

First-quarter sales will be $10.5 billion (€€9.6 billion) to $11.5 billion, the chipmaker said in a statement Thursday. That compares with an average analyst estimate of $14 billion. Intel expects to lose 15 cents in the quarter, excluding some items. Analysts had projected a profit of 25 cents.

The outlook reflects the myriad challenges facing Intel, which was attempting to stage a comeback even before the market for personal-computer chips – its main source of revenue – fell into a slump.

To get back on track, the company needs computer makers to quickly work through inventory stockpiles and return to ordering components. That would provide Intel with a revenue boost needed to help shore up its finances, which were already stretched by ambitious plans to regain technological leadership within the chip industry.

Intel shares fell more than 6 per cent in late trading following the announcement. Earlier, they closed at $30.09. The stock had gained 14% this year, part of a rally for chip equities.

The chipmaker also has been cutting costs to cope with the slowdown. Three months ago, Intel said that headcount reductions, slower spending on new plants and other belt-tightening moves will result in savings of $3 billion this year. That figure will swell to much as $10 billion annually by the end of 2025, the company said.

In the fourth quarter, Intel posted a net loss of $664 million, or 16 cents a share, down from a profit in the same period a year ago.

Revenue dropped 32 per cent to $14 billion, hitting its lowest level since 2016. Excluding certain items, profit was 10 cents a share. Wall Street was looking for a profit of 19 cents on sales of $14.5 billion. – Bloomberg