Intel 4th-quarter revenue down 23 percent
Intel warned Wednesday that its fourth-quarter revenue will fall $2 billion short of its original forecast, due to PC makers curtailing chip orders.
The announcement comes less than two months after Intel warned on November 12 that its fourth-quarter performance would fall below its original forecast.
Revenue is now expected to be about $8.2 billion, down 23 percent over the same quarter in the previous year and down 20 percent sequentially.
On November 12, Intel said it expected its revenue to be between $8.7 billion and $9.3 billion. Before that, Intel had expected to generate $10.1 billion to $10.9 billion 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 $1.1 billion and $1.2 billion, versus its previous expectation of a loss of about $50 million.
The chipmaker’s investment in Clearwire, for example, is expected to result in a noncash charge of about $950 million 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 $2.6 billion, lower than Intel’s previous forecast of $2.8 billion.
Intel, although the largest, is by no means the only chip maker to issue a fourth quarter earnings warning.