As the global recession starts to bite, chip giant Intel – always a good indicator of the fortunes of the IT industry – has cautioned that its fourth-quarter business will be below its previous outlook.
In a statement, the company says it now expects fourth-quarter revenue to be $9-billion, plus or minus $300-million, lower than the previous expectation of between $10.1-billion and $10.9-billion. Revenue is being affected by significantly weaker than expected demand in all geographies and market segments, it says. In addition, the PC supply chain is aggressively reducing component inventories.
The company's expectation for fourth-quarter gross margin is now 55% plus or minus a couple of points, lower than the previous expectation of 59% plus or minus a couple of points, primarily due to lower revenue and other charges associated with the weaker-than-expected demand environment.
Spending (R&D plus MG&A) is expected to be approximately $2.8-billion in the fourth quarter, lower than the previous expectation of approximately $2.9-billion, primarily due to lower revenue- and profit-related spending. For the full year, spending is expected to be approximately $11.4-billion, lower than the previous expectation of approximately $11.5-billion.
All other expectations are unchanged, Intel says