If ever there was an indication of recessionary times looming in the IT sector, it comes with Intel's preliminary fourth-quarter results which show lower revenues than even the world's biggest chip manufacturer itself anticipated.
In a statement, Intel says revenue will be approximately $8,2-billion, down 20% sequentially and down 23% year on year. This is lower than its previous expectation, provided in November last year, and is as a result of further weakness in end demand and inventory reductions by its customers in the global PC supply chain.
The preliminary estimate of gross margin for the fourth quarter is at the bottom of the previous expectation of 55%, plus or minus a couple of points, Intel says.
"As a result of the year-end market price of Clearwire Corporation stock, Intel will impair the value of its investment, resulting in a non-cash charge to fourth-quarter earnings of approximately $950-million," Intel says. "The company now expects the net gain or loss from equity investments and interest and other to be a loss of between $1,1-billion and $1,2-billion versus a previous expectation of a loss of approximately $50-million.
"Spending (R&D plus MG&A) is expected to be approximately $2,6-billion, lower than the previous expectation of approximately $2,8-billion.
"Restructuring and asset impairment charges are expected to be approximately $250-million, unchanged," Intel says.