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The Santa Clara, California-based company said it now expects fourth quarter revenue to be about $8.2 billion, down 20% sequentially and down 23% from a year ago.
In November, Intel had reduced its fourth quarter revenue forecast to $9 billion, plus or minus $300 million from its earlier forecast of $10.1 billion to $10.9 billion.
Analysts polled by First Call / Thomson Financial currently expect the company to post revenue of $8.74 billion for the fourth quarter.
The company also said Wednesday that its latest estimate for fourth quarter gross margin was at the bottom of the previous expectation of 55%, plus or minus a couple of points.
Intel also cut its spending plans (R&D plus MG&A) for the fourth quarter by $200 million to $2.6 billion.
Restructuring and asset impairment charges are expected to be about $250 million, unchanged from prior estimates.
Additionally, the company said the year-end market price of Clearwire Corp. (CLWR | Quote | Chart | News | PowerRating) impaired the value of its investment, resulting in a non-cash charge to fourth quarter earnings of about $950 million. The company now expects the net loss from equity investments and interest and other of between $1.1 billion and $1.2 billion, much worse than its prior expectation of a loss of about $50 million.
Intel is scheduled to release its fourth quarter financial results on January 15.
Intel is the world's largest supplier of microprocessors, the brains of personal computers, with roughly 80% of the global market share. Intel's projection reflects the grim situation the industry is facing in the midst of the economic crisis.
Analysts feel that Intel is better positioned than many other chipmakers, with bigger profit margins, a strong product line and a network of factories that have adopted advanced manufacturing facilities. However, Intel could be in trouble if demand falls quickly and its production lines are not fully utilized.
Intel's smaller rival, Advanced Micro Devices Inc. (AMD | Quote | Chart | News | PowerRating), cut its fourth quarter revenue sales forecast early last month, saying it expected fourth quarter revenue to decline about 25% from the third quarter level. Both Intel and AMD had assured earlier that they would not change thier fourth quarter revenue guidance further, but weakening consumer demand due to the ongoing economic crisis has forced them to revise their targets.
Last month, a flurry of chipmaker, including Fairchild Semiconductor (FCS | Quote | Chart | News | PowerRating), Texas Instruments, Inc. (TXN | Quote | Chart | News | PowerRating) and Broadcom Corp. (BRCM | Quote | Chart | News | PowerRating), lowered their revenue forecasts for the fourth quarter due to weak demand for thier chips.
Intel shares are currently trading at $14.80, down 57 cents or 3.71%. The shares are trading in a 52-week range of $12.06 to $25.29.
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