Intel warns of $2bn revenue shortfall
Published: 07 Jan 2009 17:27 GMT
Intel warned on Wednesday that its fourth-quarter revenue will fall $2bn short of its original forecast, due to PC makers curtailing chip orders.
The announcement comes less than two months after Intel warned on 12 November that its fourth-quarter performance would fall below its original forecast. Revenue is now expected to be about $8.2bn (£5.4bn), down 23 percent over the same quarter in the previous year and down 20 percent sequentially.
On 12 November, Intel said it expected its revenue to be between $8.7bn and $9.3bn. Before that, Intel had expected to generate $10.1bn to $10.9bn in revenue for the quarter.
The drop in revenue is a result of PC makers slicing orders and living off their existing inventory of chips, Intel said.
Intel also noted it expects to report a greater loss in its equity investment, interest and "other" category of between $1.1bn and $1.2bn, versus its previous expectation of a loss of about $50m.The chipmaker's investment in Clearwire, for example, is expected to result in a non-cash charge of about $950m in the fourth quarter.
Intel's gross margin is now expected to fall toward the "bottom of the previous expectation of 55 percent, plus or minus a couple of points", the company said. Research and development spending, as well as general and administrative costs, are anticipated to be $2.6bn, lower than Intel's previous forecast of $2.8bn.
Intel shares fell as low as 6.7 percent to $14.34 in early morning trading. The company is set to report fourth-quarter earnings on 15 January.
Credit: Intel expects fourth-quarter revenue to drop 23 percent from CNET News.com
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