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Wednesday, January 07, 2009

Intel: Revenue to Plunge 23% in Fourth Quarter

By Donna Fuscaldo

FOXBusiness

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Semiconductor bellwether Intel (INTC) said Wednesday revenue in its fourth quarter will be down 23%, lower than its past target.

In a press release issuing preliminary results for its fourth quarter, Santa Clara, Calif.-based Intel blamed further weakness in demand and inventory reductions from customers in the PC market for the steep revenue decline.

For its fourth quarter Intel expects revenue to come in at $8.2 billion, a 23% decline from last year’s fourth quarter and a 20% decline from the third quarter. Intel said its preliminary estimate for gross margins in the fourth quarter is at the low end of its past target of 55% plus or minus a couple of points.

Intel also said it will take a roughly $950 million charge in the fourth quarter due to the decline in the value of its investment in Clearwire. Intel expects its loss from equity investments to be between $1.1 billion and $1.2 billion, steeper than its previous expectations of loss of about $50 million.

Spending at Intel is expected to be around $2.6 billion, down from $2.8 billion while restructuring and asset impairment charges are expected to be around $250m. Intel plans to provide more information when it reports official results on Jan. 15.

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