Intel to face heat if HP spins off PC business: Nomura

A man walks past an Intel logo during a news conference in Taipei October 28, 2010.

REUTERS - Intel Corp's PC business will face greater pricing pressure following Hewlett-Packard Co's decision to spin off its personal computers business, Nomura said and added that it expects the top chipmaker to miss its third-quarter guidance.

On Thursday, HP said it may spin off its PC business -- the world's largest -- as part of a wrenching series of moves away from the consumer market, including killing its new tablet and buying British software company Autonomy Corp for as much as $11.7 billion.

Intel's PC Client group -- which caters to personal computers -- accounted for 64 percent of the chipmaker's sales last quarter, the brokerage said. It maintained its "reduce" rating on the stock and a price target of $18.

Nomura said HP's lowered outlook for the second half of 2011, consistent with Dell Inc and NetApp Inc's weak forecasts, backs its view that Intel will miss its third-quarter outlook.

Last month, Intel forecast third-quarter revenue of about $14 billion, give or take $500 million.

Intel's shares closed at $19.77 on Thursday on Nasdaq.

(Reporting by Sruthi Ramakrishnan in Bangalore; Editing by Joyjeet Das)