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Intel Matches Estimates but Revenue Down 25% From Year Ago

The chipmaker maintains fourth-quarter estimates.


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Tuesday reported third-quarter earnings that matched Wall Street's expectations and forecast similar fourth-quarter results.

For the quarter ended Sept. 29, revenue fell 25% from a year ago, to $6.5 billion. Earnings before acquisition-related charges fell 77%, to 10 cents a share from 41 cents a year earlier. Both figures were in line with estimates compiled by Thomson Financial/First Call.

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Intel also forecast that fourth-quarter revenue would amount to $6.2 billion to $6.8 billion, matching its third-quarter guidance. The company said fourth-quarter gross margin would inch up to 47% from 46% in the third. All those figures roughly match Wall Street's guidance.

On Sept. 7, Intel updated previous guidance by saying it would likely meet the low end of the expected revenue range between $6.2 billion to $6.8 billion. In the second quarter Intel posted earnings of 3 cents per share on revenue of $6.3 billion.

Intel executives had said in July that they expected sales in the second half of the year to increase, but given that the chip industry is in its greatest decline ever, few on Wall Street are banking on it. Investors are concerned about the company's longer-term outlook and are especially eager to hear any updates to the 2002 forecast.

While the company expects to cut more than 5,000 employees through attrition by the end of the year, CEO Craig Barrett made it clear in a companywide speech last month that the operation was still bloated at 80,000 workers. He said the headcount was 20,000 higher than two years ago, when the company last had revenue at these levels. Though Barrett

said at the time that no major job cuts were planned, he added that improved sales next year would be the only thing preventing deeper cuts.