NEW YORK (AP) -- Intel Corp., the world's largest maker of chips for PCs, on Tuesday reports its results for the first quarter, which saw the sharpest drop yet in worldwide PC sales.
WHAT TO WATCH FOR: Intel is the king of the PC processor, but what happens when people don't want PCs?
Research firm IDC reported that global PC shipments plunged 14 percent in the first quarter, the fastest decline it's seen since it started tracking sales in 1994. Another firm, Gartner, put the decline at 11 percent. That's bound to affect Intel's sales, but analysts have been fairly moderate in their revisions, and expect Intel to report sales at the low end of its own expected range.
This doesn't necessarily spell doom for Intel, but it's a glum situation. PC sales are falling because consumers prefer to spend their money on tablets and smartphones. But businesses are still buying, and Intel is the biggest maker of processors for servers as well.
Still, Intel is trying hard to get into devices that consumers are buying, and it's hoping to entice them with a new generation of chips launching this year that should bring a near-laptop level of performance to tablets and laptop-tablet hybrids.
Stifel Nicolaus analyst Kevin Cassidy says he is optimistic about the new chips, but revised his full-year Intel sales forecast Friday to zero growth compared to 2012. Three months ago, the company said sales would grow a few percent this year, but it might update its forecast on Tuesday.
Analysts will also be listening for updates on Intel's $13 billion capital spending plans, which could affect its equipment suppliers.
Lastly, company watchers are eager to hear who will be the new CEO. Paul Otellini announced late last year that he will retire at the company's annual meeting this year. The board plans to name Otellini's successor before the May 16 meeting.
WHY IT MATTERS: Intel's processors are inside about 80 percent of the world's PCs, and its results are often a bellwether for other chip companies. Its stock is one of the 30 in the Dow Jones industrial average.
WHAT'S EXPECTED: Analysts expect earnings of 40 cents per share on $12.6 billion in sales. The Santa Clara, Calif., company's own forecast is for about $12.7 billion in first-quarter revenue.
Intel usually gives a revenue forecast for the new quarter ending in June. Analysts are expecting $12.9 billion.
LAST YEAR'S QUARTER: In the first quarter of 2012, Intel earned 53 cents per share. Sales were $12.9 billion.
- Investment & Company Information