Intel cuts revenue forecast for this quarter

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."

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    • dale77
    • 11 years ago

    Hmmm. Maybe there is a problem with Core i7? Certainly hope so for the sake of those AMD boys.

      • UberGerbil
      • 11 years ago

      This has nothing to do with the i7 (which wasn’t going to ship in large enough quantities to have this much impact on the 4Q in any event) and everything to do with larger macro-economic forces.

    • lucas1985
    • 11 years ago

    #1,
    I did the opposite. I expected the drop in Intel’s stock before buying them 🙂

    • SecretMaster
    • 11 years ago

    Well Intel’s news certainly has affected stock prices of AMD. It is at 2.44/share now. I’m tempted to buy a bunch, but I want to see how low it will go.

      • pdjblum
      • 11 years ago

      How will you know how low it will go? If you could figure that out, you would be richer than rich. You can only know how low it will go when it is no longer as low as it once was, and then it will be too late to buy it at the low. If you think it is a good value, then buy it, and if it goes lower, then buy more.

        • UberGerbil
        • 11 years ago

        And if it goes to zero, you can always ask for the certificates and use them to line a birdcage, or wrap fish, or wallpaper your bathroom.

        But pdjblum is right: assuming you think they’ll survive, it all depends on your timeline — do you have a better use for that money vs having it tied up in a stock that you’re waiting to see rebound? If you can afford it, and you think they eventually will be profitable enough to justify a higher price, buy some now; if it gets cheaper, buy a little more. Trying to pick the bottom is a fool’s game.

    • Kulith
    • 11 years ago

    Why is intel doing bad? I mean, who the hell buys amd?

      • ThomasDM
      • 11 years ago

      Because we’re in the midst of an economic crisis. Sales and ASP are dropping.

      • UberGerbil
      • 11 years ago

      It’s not that people are deciding to not buy Intel CPUs and are buying AMD CPUs instead. It’s that people are deciding to not buy CPUs, period.

      The investment banking business represented something like 20% of total IT expenditures annually. (Lehman Brothers alone spent something like $2B in ’07). That’s gone. So are back office expenditures for WaMu (soon to be handled by Chase) and others, along with any other white collar workers who have been laid off. So no new purchases for them; and no new home PCs for anybody worried about losing their job, or just trying to cut expenses. Moreover, there there are bunch of empty offices full of nearly new computers that are going to show up in the used market, further suppressing demand for new tech.

      All things considered, the fact that Intel only trimmed its quarterly projections by 10-20% (vs their previous low-high estimates) is pretty good. Of course, they may still fail to meet those.

      Compare them to Ford, or GM, or UAL. As weak as tech is, it’s a better place to be than a lot of other American industries.

    • ssidbroadcast
    • 11 years ago

    You know those stocks that I bought yesterday? Yeah, they’re down now because of this >: /

      • ssidbroadcast
      • 11 years ago

      Nevermind!! They rebounded and I’m up!!

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