Intel warned on Wednesday that its fourth-quarter revenue will fall US$2 billion short of its original forecast, due to PC makers curtailing chip orders.
The announcement comes less than two months after Intel warned on in November its fourth-quarter performance would fall below its original forecast. Revenue is now expected to be about US$8.2 billion, down 23 percent over the same quarter in the previous year and down 20 percent sequentially.
On Nov. 12, Intel said it expected its revenue to be between US$8.7 billion and US$9.3 billion. Before that, Intel had expected to generate US$10.1 billion to US$10.9 billion in revenue for the quarter.
The drop in revenue is a result of PC makers slicing orders and living off their existing inventory of chips, Intel said.
Intel also noted it expects to report a greater loss in its equity investment, interest and "other" category of between US$1.1 billion and US$1.2 billion, versus its previous expectation of a loss of about US$50 million. The chipmaker's investment in Clearwire, for example, is expected to result in a non-cash charge of about US$950 million in the fourth quarter.
Intel's gross margin is now expected to fall toward the "bottom of the previous expectation of 55 percent, plus or minus a couple of points", the company said. Research and development spending, as well as general and administrative costs, are anticipated to be US$2.6 billion, lower than Intel's previous forecast of US$2.8 billion.
Intel shares fell as low as 6.7 percent to US$14.34 in early morning trading. The company is set to report fourth-quarter earnings on Jan. 15.
This article was first published as a blog post on CNET News.com.
Play video
There are currently no comments for this post.