In a price war, everybody loses. This grim reality appears to be sinking into the minds of investors, following Intel's ( INTC) earnings report Wednesday. The Santa Clara, Calif., chipmaker has been furiously slashing prices to clear out old inventory and put pressure on rival Advanced Micro Devices ( AMD). But while the price-cutting has taken a toll on AMD, which is set to report its own second-quarter earnings report after the bell today, Intel is not exactly thriving either. Instead of its second quarter marking the low point of Intel's financial crisis, the company said it expected more hard times ahead. Intel once again pared back its guidance for full-year 2006 revenue, saying it will be lower than the $38.8 billion it forecast in April. While Intel entered the year predicting 6% to 9% revenue growth, it now looks like revenue could be as much as 10% lower than 2005, say some analysts. "This isn't a stock I would start to buy again until these earnings revisions stop," says Michael Church, portfolio manager at Church Capital Management, which owns a small stake of Intel shares. Shares of Intel recently slipped 94 cents, or more than 5%, to $17.55 in midday trading Thursday. The culprit appears to be what Intel describes as an "unusually competitive pricing environment" that is compressing the average selling prices of its various microprocessors and eroding margins. What's spooking investors is that Intel's price cuts are looking less like an offensive tactic and more like a defensive reaction that's largely out of the company's control. "Had they come out and said that a lot of the ASP decline was attributable to their own decision to make an attack on AMD, the market would have been more forgiving," says Church.