Intel's

(INTC) - Get Report

earnings warning in early September

sent shock waves reverberating through the tech market. But some analysts wonder whether the No. 1 chipmaker worldwide can even meet that lowered sales bar when it reports third-quarter results Tuesday.

About a month ago, Chief Financial Officer Andy Bryant publicly acknowledged that Intel's sales were being hurt by softer-than-expected demand for both its flagship microprocessor line and flash memory chips. The company

lowered its third-quarter revenue expectations to between $8.3 billion and $8.6 billion, below the range of $8.6 billion to $9.2 billion it forecast in July.

Wall Street analysts think Intel can deliver revenue of $8.45 billion -- the midpoint of the revised forecast, compared with July's $8.9 billion -- with earnings of 27 cents a share.

The revised midpoint suggests that Intel's sales will be up 4% to 5% from the prior quarter, a little below the company's 7% average third-quarter growth over the past five years. By comparison,

Texas Instruments

(TXN) - Get Report

,

Xilinx

(XLNX) - Get Report

,

Altera

(ALTR) - Get Report

and

Broadcom

(BRCM)

all expect flat to negative sequential growth for the September quarter.

Indeed, if Intel does manage to meet its downwardly revised guidance, it will rank as one of the better-performing big chipmakers for the September quarter, measured by quarterly revenue growth, noted A.G. Edwards analyst David Wong. (His firm hasn't done any recent banking for Intel.)

A subsequent rash of confessions from competitors has only increased anxiety among Intel investors. By all accounts, industrywide chip sales in September, the final month of the period, came in on the light side of expectations.

But meeting third-quarter numbers isn't the only hurdle for Intel. Investors will also be looking to see whether it can guide fourth-quarter revenue in line with the consensus estimate for $9.08 billion. Analysts are expecting earnings per share of 30 cents for the quarter ending in December, according to Thomson First Call.

Demanding Explanations

"I think they will guide to seasonal growth in the fourth quarter, but that doesn't really mean anything," said one skeptical hedge fund trader who's nonetheless long Intel shares. "I doubt they will have really good visibility, but it's sort of in their nature to bank on seasonal growth, and if they need to make adjustments, they will."

Visibility is so cloudy in the current environment that a couple of semiconductor companies actually cut their outlooks twice. In the past few weeks, fellow big-cap chipmakers

Intersil

(ISIL)

and

Cypress Semiconductor

(CY) - Get Report

cut their third-quarter outlooks a second time because demand failed to pick up in September.

Such multiple profit warnings within a single quarter are highly unusual and reflect a cluelessness among top semiconductor executives when it comes to gauging demand.

Also worrisome, chip bellwether and leading global foundry

Taiwan Semiconductor

(TSM) - Get Report

said Thursday that demand for its chip-manufacturing services had softened over the past two months.

But some Intel watchers have found consolation in comments from

Dell

(DELL) - Get Report

and other PC makers, all of whom have suggested that computer demand is on par with expectations.

On Sept. 28, Dell reaffirmed its October quarter outlook for 7% sequential growth. Also in September,

Hewlett-Packard

(HPQ) - Get Report

and

Gateway

(GTW)

said their quarters were tracking to expectations.

Dell and H-P respectively accounted for 19% and 15% of Intel's sales in 2003.

"If you think the economy is going to roll over, Intel is going to roll over. But Dell keeps saying business is pretty good," pointed out Alan Lowenstein, a co-manager of the

(NTTFX)

John Hancock Technology fund, which has a holding in the stock.

But When the Chips Are Down

The unnamed hedge fund trader continues to own Intel shares because he thinks the beaten-down stock is likely to rally in the short term if it can meet guidance. "For an individual investor, I think it's an OK place to trade," he said. But longer term, he's bearish.

"As you look out three to 12 months, I think the risk/reward is not that interesting. My own view is these semiconductor stocks could correct 30% to 40%," said the trader.

Indeed, lately, even Intel's supporters have sounded lukewarm about prospects for a serious bounce in its share price. The stock dropped as low as $19.68 toward the end of September as Wall Street stewed in the wake of its negative midquarter update.

Though shares have since crept back, closing Monday at $20.61, Intel has still lost about one-third of its value since Dec. 31, when it closed at $32.05.

Still, JMP Securities analyst Krishna Shankar said in a recent note that he thought Intel should remain a core holding for tech investors. "But we believe that the stock will likely stay in a trading range of $18 to $22 near term in the absence of strong upside catalysts," he added. (JMP hasn't done any recent banking for Intel.)