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Wednesday, January 07, 2009
Intel: Revenue to Plunge 23% in Fourth Quarter
Donna Fuscaldo
FOXBusiness
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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Some mutual funds want you to pay for the privilege of them (or your investment adviser) taking your money to invest. It's called a load, and it works like a cover charge to get into a nightclub. Luckily, there are such things as no-load funds. As the name implies, shares of these funds are sold without a fee paid to a broker or investment advisor.
The entire amount you invest in no-load funds goes to work for your returns. On the other hand, with load funds, right off the bat you're charged commission (not to mention other fees incurred over the life of the investment). Let's say, for example, you invest $25,000 into a load fund that charges a 5% commission. This costs you $1,250 off the top, bringing your actual investment down to only $23,750.
The often-cited horse race analogy argues against investing in load funds. Here's the logic behind it: Would you place a bet on a horse that had to start a race 200 yards behind the others? Well, maybe you would if you got a tip from a sketchy, trench coat-clad man in a dark alley. However, under most circumstances, it's not smart to put your money on that handicapped horse.
But some argue that at times that man in the trench coat (aka your broker) knows more about the horses than you do, and has a better shot at picking a winner. Also, sometimes these fees are unavoidable because some funds are available only through investment advisers.
Cost-benefit analysis can help determine when a load fund is worth it (in other words, when it will score you a load) and when it is better to "do it yourself" and avoid the fees. Load-fund fees range depending on share class and can cover a variety of costs, such as paper work and fund management.
