Friday, November 14, 2008

Intel predicts poor quarter

Chip maker Intel warned investors that the company could be in for lean times due to the current economic slump – dropping revenue forecasts by a whopping 14 percent.

Although the company had already adjusted its revenue outlook last month based on a slowing of global spending, BetaNews reports that Intel has made the surprising move of restating its predictions for a second time – and the news isn't good.

The company had previously predicted revenue of $10.5 billion for Quarter 4 2008, but has now stated that it expects that figure to be closer to $9 billion with margin predictions dropping from 59 percent to 55 percent due to price reductions the company has been forced to make in order to boost sales.

Intel's statement to investors reports that "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," something the company is extremely concerned about – with the bulk of its sales being made to OEMs, this is the market sector that Intel really needs support from right now.

With Intel's latest chip – the i7 – due real soon now, the company will be hoping that some fresh technology will help boost sales and therefore investor confidence. At least the company has one thing on its side: despite stock price being at an 11-year low of $13.50, this latest bout of bad news doesn't seem to have triggered any major stock shifting by investors. Clearly there is hope that the company will weather the storm and come out the other side stronger and, hopefully, wiser.

Do you think that i7 will be Intel's saviour, or does the company need more than a new chip to get revenue back up and restore health to its share price? Share your thoughts over in the forums.

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