Intel Corp. on Wednesday announced that fourth-quarter business will be below the company's previous outlook. According to Intel, revenue is being affected by significantly weaker than expected demand in all geographies and market segments. In addition, the PC supply chain is aggressively reducing component inventories, the firm said.

The company 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. The third quarter of 2008 was record for Intel with revenue of $10.2 billion along with operating income of $3.1 billion, net income of $2 billion and earnings per share (EPS) of 35 cents.

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.

Intel issues warning for the quarter after numerous analysts reduced their estimations for both Intel's and AMD's financial performance citing slowdown of the world’s economy.

Tags: Intel