Intel has downgraded its fourth-quarter sales forecast for the second time in recent weeks, citing "further weakness in end demand and inventory reductions by its customers in the global PC supply chain."
The Santa Clara, Calif.-based chip giant, which officially reports its fourth-quarter earnings on Jan. 15, said in a statement to investors Wednesday that it now expects revenues for the quarter to be $8.2 billion, down 20 percent from $10.2 billion in Q3 and down 23 percent year-over-year. Intel had already lowered its original Q4 guidance for between $10.1 billion and $10.9 billion in sales on Nov. 12, when the company downgraded that forecast to about $9 billion in expected Q4 revenues.
Intel, the leading maker of microprocessors used in PCs and servers, also warned that its Q4 gross margin "is at the bottom of the previous expectation of 55 percent, plus or minus a couple of points." If Intel's final gross margin numbers line up at 53 percent, it would be a seven-point drop from the company's Q3 performance.
The chip maker's investment in Clearwire also took a hit and brings a previously expected $50 million loss from equity investments and interest into the $1.1 billion to $1.2 billion range for the quarter, the statement said. Intel will take a $950-million, non-cash charge to its Q4 earnings after impairing the value of the Clearwire investment.
Intel did cut its Q4 spending by about $200 million more than expected, however. The chip maker now expects spending for the quarter to be about $2.6 billion, down from the previous expectation of $2.8 billion.
