"It's very discouraging," said Daniel Morgan, a fund manager for Synovus Securities Inc., which owns Intel shares. "We'd have liked to have seen a little bit better growth."
Intel also said fourth-quarter net income slipped to $3.6 billion, or 74 cents a share, from $3.7 billion, or 74 cents, a year earlier. Revenue climbed to $14.9 billion.
Analysts had projected earnings of 63 cents on sales of $14.8 billion, the average of estimates compiled by Bloomberg.
Gross margin, the only measure of profitability that Intel forecasts, was 64 percent in the fourth quarter, and will contract to 58 percent in the current period, compared with an average analyst prediction of 61 percent. Gross margin is the percentage of sales remaining after deducting the cost of production.
Fourth-quarter revenue in Intel's PC-chip division fell 1.2 percent to $8.76 billion, or 59 percent of total sales. The data center group posted sales of $4.31 billion.
Intel's results and outlook include contributions from Altera Corp. for the first time, after its $16.7 billion acquisition of the chipmaker closed last month. The current period's forecast also includes an extra week over the standard three-month period.
Intel is the first major U.S. technology company to report fourth-quarter earnings amid a decline in global equity markets this year. The chipmaker gets more than 80 percent of its sales outside the United States.
Earlier this week, market researchers said worldwide PC shipments dropped in 2015, ending the year at fewer than 300 million units for the first time since 2008.
PC makers sold 75.7 million machines in the fourth quarter, a decline of 8.3 percent from a year earlier, according to Gartner Inc., failing to get a boost from holiday sales as more consumers opt to purchase smartphones and tablets.
Though Intel's PC-chip division has been suffering, it still provides the revenue and volume of orders needed to justify the company's industry-leading investment in its factories.
That production technology has helped Intel stay ahead in servers, which provide much wider profit margins. A top-of-the line Xeon part for servers has a retail price of more than $7,000 — more than seven times the price of its most expensive desktop computer chip.
Intel's phone-chip business, which had been reporting losses in the billions of dollars a year before being wrapped into the PC division, may finally be beginning to achieve a turnaround.
The company is increasing production of modem chips, a possible indication it could win orders from a major manufacturer such as Samsung Electronics or Apple, according to analysts including Doug Freedman of Sterne Agee CRT.