Intel forecasts revenue shortfall

Associated Press

SAN JOSE, Calif. — Intel Corp., joining the increasingly pessimistic chorus from high-tech businesses, warned Thursday that poor domestic computer sales will cause it to fall short of fourth-quarter revenue projections.

Intel said that because several large orders have been canceled, fourth-quarter revenue will be flat from the previous quarter, down from previous expectations of a 4 percent to 8 percent increase.

Margins and expenses are expected to remain the same.

But Intel said it expected to earn only $675 million from interest and investments in this quarter, down from previous expectations of $950 million. The company blamed that slide partly on the poor performance of the equity markets this fall.

Before the announcement, shares of Intel finished regular trading up 56 cents to $32.13 on the Nasdaq Stock Market. The stock continued to rise, to $32.52, in the extended-trading session, though shares have fallen in the past few days on worries Intel would issue such a warning.

As recently as Nov. 29, shares of Intel were trading above $43.

Intel plans to release its earnings report on Jan. 16. Analysts surveyed by First Call/Thomson Financial had been expecting 42 cents a share, up from 35 cents per share in same period last year.

As the leading maker of chips for PCs, Intel’s fortunes are indirectly tied to the PC market. Leading PC makers such as Gateway and Apple Computer have warned in recent days that holiday sales in the United States have been slower than expected, sending technology stocks lower across the board.

Microsoft Corp., for example, fell $3.56 to $53.13 Thursday and is now more than 50 percent off its all-time high.

The computer sales slowdown has been blamed on a saturated market and fears of an overall downturn in the economy.

Copyright ©2000 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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