Intel lowers revenue predictions on softer chip sales

Intel has made a special financial news announcement and its not good for the processor maker or for the entire PC industry. The company's press release says it is now lowering its previously predicted revenue numbers for the company's third quarter and its entire year.

Intel's announcement states that for the third quarter, which ends on September 30th, the company will have revenues of "$13.2 billion, plus or minus $300 million". Previously, Intel said it had expected revenue of between $13.8 billion to $14.8 billion.

What happened? Intel says:

Relative to the prior forecast, the company is seeing customers reducing inventory in the supply chain versus the normal growth in third-quarter inventory; softness in the enterprise PC market segment; and slowing emerging market demand.

What does that mean? Basically, Intel's customers have yet to get rid of the processors they already have available on hand, due most likely to slow PC sales, and as such have not bought a lot of new chips from Intel. That likely means that customers are currently waiting for Windows 8 to come out before buying new PCs.

The big question: With Windows 8 due for its commercial release on October 26th, will enough people buy new PCs to help Intel in the final quarter of the year?

Source: Intel press release | Image via Intel

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5 Comments

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Yeah, and we're in a spot where software still needs to catch up with what the new chips are capable of. A 5 year old Core2 Quad still holds up to today's software demands, and then some.

Likely not - remember, the hardware requirements for 8 (vs. 7) went absolutely nowhere; worse, the economy is still crappy. Hence lots of excuses are being found to NOT buy new(er) hardware, especially in businesses.

Grrr.... losing a lot of money on their stock today. Should probably dump a few shares before the official bad news after the quarter ends.

Astra.Xtreme said,
Grrr.... losing a lot of money on their stock today. Should probably dump a few shares before the official bad news after the quarter ends.

I'd buy more if I were you. It's Intel. There not going anywhere --They will go back up and make more money.

Tyler R. said,

I'd buy more if I were you. It's Intel. There not going anywhere --They will go back up and make more money.

Yeah, I'll definitely keep Intel in my portfolio forever. I bought these shares when they were at a $19 low point a little over a year ago, and I don't want a bad 3rd quarter to make that profit evaporate. Could be a good strategy to sell now, wait for the drop from the 3rd quarter news, and then buy in again. I'm kicking myself for not selling when it was at about $30 a the end of April.