Intel Corp., the world's largest chipmaker, today became the latest company to warn that fourth quarter revenue is anticipated to be below the company's previous expectation, primarily due to a slowing worldwide economy impacting PC demand.
As a result of recent large cancellations by customers worldwide, the company now expects revenue for the fourth quarter to be flat, plus or minus a couple of percentage points, with third quarter revenue of $8.7 billion. This is lower than the previous expectation that fourth quarter revenue would be up 4 to 8 percent from third quarterrevenue.
Intel's sales shortfall in the fourth quarter was due to weakness in all geographies and in all of its products with the exception of flash memory chips, the company's chief financial Officer Andy Bryant said in an interview.
``What we believe is happening is a worldwide economic slowdown,'' Bryant said. ``It's every place in the world and it's nearly every product we sell.''
Bryant also said that inventories among most of its customers were ``within historical norms'' and that he did not expect a huge personal computer inventory overhang going into the first
``Some customers and geographies may have some issues, but overall it's not a big problem,'' Bryant said.
The company's expectation for gross margin percentage for the fourth quarter remains 63 percent, plus or minus a point. Expenses (R&D, excluding in-process R&D, plus MG&A) in the fourth quarter are now expected to be approximately flat with third quarter expenses of $2.3 billion. This is lower
than the previous expectation that fourth quarter expenses would be up 6 to 8 percent from third quarter expenses, due primarily to a slowdown in discretionary spending and lower revenue and profit dependent expenses.
Interest and other is expected to be approximately $675 million for the fourth quarter, down from the company's previous expectation of $950 million, due to lower than expected
realized gains on equity investments as equity market levels fell during the quarter.
Reuters contributed to this article.