Intel cuts revenue forecast by $1bn

Intel, the world’s largest chipmaker by sales, said its fourth-quarter revenue would miss forecasts because of a shortage of hard disk drives.

The company cut its forecast for revenue in the October through December period to $13.7bn, plus or minus $300m, from an earlier estimate of $14.7bn, plus or minus $500m. Analysts surveyed by Bloomberg had also predicted revenues of $14.7bn.

Intel cited a shortage in the supply of hard disks, which has resulted in computer manufacturers reducing inventories and cutting back on microprocessor purchases. The company is the leading producer of microprocessor chips, which perform the central processes of computers.

About one-third of the world’s hard disk drive production is located in Thailand, which was hit by devastating flooding in recent months. In November, many computer makers said they expected fourth-quarter sales would be affected by the disruption to their supply chains.

Intel said on Monday: “The company expects hard disk drive supply shortages to continue into the first quarter, followed by a rebuilding of microprocessor inventories as supplies of hard disk drives recover during the first half of 2012,.” However, the company added that PC sales were expected to rise in the fourth quarter from the third quarter.

Intel also cut its forecast for gross margin in the quarter from 65 per cent to 64.5 per cent.

The company’s shares were down 4.7 per cent to $23.84 in early trading in New York. Intel’s stock had risen 30 per cent over the past three months, helped by strong growth in chips. Rising demand for PCs in emerging markets have contributed significantly to that growth.
(ft.com)