Intel Lowers Fourth-Quarter Revenue Outlook Again

Microchip maker Intel said on Wednesday its fourth-quarter revenue was likely worse than expected due to weaker global demand for personal computers, dragging its shares down more than 6 percent.

Intel estimated its quarterly revenue was about $8.2 billion, down 23 percent from a year earlier.

Paul Sakuma / AP Intel's headquarters in Santa Clara, California.

In November, it had forecast $9 billion, plus or minus $300 million, marked down from an even earlier forecast of $10.1 billion to $10.9 billion. Intel Chairman Craig Barrett had said in late November that the revision was final.

The latest warning also stated its gross margin was likely "at the bottom" of its previous expectation of 55 percent, plus or minus a couple of percentage points.

It also said the year-end share price of Clearwire impaired the value of its investment, and forecast a net loss from equity investments and interest of between $1.1 billion and $1.2 billion—worse than its previous expectation of a loss of around $50 million.

Intel shares fell over 6 percent to below $15 in early Nasdaq trading, and together with a weaker-than-expected jobs report, weighed down the overall market.

Microsoft shares fell almost 3 percent to near $20.

"Clearly we are going to be in an ugly period for corporate earnings," said Tim Ghriskey, chief investment officer at Solaris Asset Management, which manages $2 billion, predicting similar warnings in coming weeks.

"It makes these next two weeks particularly risky on an individual stock basis," he said.

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But analysts also said the latest warning should have come as no surprise given the rapid slowdown in business activity late last year.

"If you are surprised by this news, then you've been on a desert island. We all know the economy is weak," said Walter Todd, portfolio manager at Greenwood Capital Associates.

"If you're holding Intel today ... it's because this is a leading industry player with a great balance sheet and longer-term it will really look great," he said, "But 2009 for Intel and others in technology, and outside of technology, will be a very rough earnings year."

Intel is due to report quarterly results on Jan. 15.

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