Intel (INTC) Lowers Fourth Quarter Guidance
The hits just keep on coming. Intel lowered their fourth quarter guidance today after the close. It now expects revenue of $9B vs. $10.36B est. The company’s previous expectations were $10.1-10.9B.
Revenue is being affected by significantly weaker than expected demand in all geographies and market segments. In addition, the PC supply chain is aggressively reducing component inventories.
Gross margin guidance also goes to 55% from 59% previously. They will also cut R&D and MG&A spending from $2.9B to $2.8B. They will not do the previously scheduled December 4th update call and will observe a quiet period till January 15, 2009.
With Best Buy and Intel today, it’s obvious people are not spending on discretionary consumer electronics and PCs. The new guidance is a 16% decline y/y in revenue. This is stunning as the company is launching their new CPU this month, code-named Nehalem, with amazing performance increases.