After a series of several surprisingly healthy quarters, the soft economy may have finally caught up with Intel. The chipmaker has trimmed its revenue forecast by $1.1 billion, and it now expects gross margin to be around four points below the previously announced figure.
Intel posted sales of $10.3 billion—its best third-quarter revenue ever, according to CEO Paul Otellini—and a 59% gross margin last quarter, and it forecast fourth-quarter revenue of $10.1-10.9 billion with a 57-61% margin. Now, the company expects Q4 revenue to reach only $9 billion with a gross margin of 55% "plus or minus a couple of points." That'd be a pretty big drop both sequentially and compared the fourth quarter of last year, which saw Intel rake in $10.7 billion with a 58% margin.
Intel attributes the revised forecast to "significantly weaker than expected demand in all geographies and market segments" as well as a PC supply chain that's "aggressively reducing component inventories."