Intel today announced its fourth quarter earnings for 2018, missing analyst expectations. The company reported revenue of $18.66 billion, missing Wall Street expectations of $19.01 billion. In its release, Intel attributes its lower-than-expected revenue to slow modem sales.

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Despite missing expectations, Intel’s revenue was still up 9 percent year-over-year. Earnings-per-share also beat analyst expectations at $1.28 per share, versus $1.22 per share expected.

In its “Executive Summary” of its Q4 2018 earnings, Intel says that its revenue being “below Oct’18 expectations” is due to “weaker modem demand, a slowdown in China, cloud customers absorbing capacity, and a weakening NAND environment.”

Intel is the sole supplier of modems for the iPhone XS, iPhone XS Max, and iPhone XR, which explains why it felt the effects of sluggish iPhone sales during the holiday quarter. Qualcomm continues to supply some modems for earlier iPhone models that Apple still sells today.

Further, Intel isn’t alone in having its Q4 2018 performance affected by Apple’s lower-than-expected performance. Numerous other suppliers have missed their guidance or been forced to revise their numbers.

One analyst expects Intel’s struggles to continue into the first quarter of 2019. As reported by CNBC, KeyBanc Capital Markets analyst Weston Twigg expects Intel’s headwinds to mount in Q1:

“With the semiconductor industry facing a number of headwinds, a including a slowing Chinese economy, soft smartphone sales, softening auto demand, slowing hyperscale demand, a lingering government shutdown, and ongoing trade war certainty, Intel has remained in a strong position relative to peers, with its own supply shortages likely insulating it from headwinds,” Twigg wrote.

“However, we expect headwinds to mount in 1Q as data center demand likely continues to slow and Intel’s new Apple modem business likely declines amid soft demand.”

As for its guidance heading into 2019, Intel expects EPS of 87 cents with revenue of $16 billion. Analysts were anticipating EPS of $1.01 and revenue of $17.35 billion.

Intel shares are down around 8 percent in after-hours trading.

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