Intel revises earnings for the second time

Intel, the worldÔÇÖs largest computer chip maker, has cut its forecast for its fourth-quarter earnings for the second time, as spending on computers fall. ┬á  In November, Intel had revised its quarterly revenue estimate from $10.9 billion down to $9 billion, and on Wednesday announced that it was likely to be $8.2 billion, 23 percent lower than last yearÔÇÖs fourth-quarter revenue.┬á┬á  Cody Acree, a senior semiconductor analyst with Stifel Nicolaus, said weaker than expected business conditions are not Intel-specific. "Right now the economy is causing everybody up and down the manufacturing channel to live hand to mouth."┬á┬á Walter Todd, a portfolio manager at Greenwood Capital Associates, said: "If you are surprised by this news then you've been on a desert island. We all know the economy is weak."┬á┬á Industry analysts have been warning for months that even downwardly revised forecasts from PC suppliers like Intel looked too optimistic in the current economic conditions, and IntelÔÇÖs second revision indicates just how deeply the semiconductor industry has been affected. Ongoing market volatility has made it exceedingly difficult to forecast results. "Clearly we are going to be in an ugly period for corporate earnings. That shouldn't be a surprise to anybody," said Tim Ghriskey, chief investment officer at Solaris Asset Management.  ┬á┬á Consumers, burned by layoffs, falling home prices and stock portfolios, have decreased their spending, which in turn has prompted PC makers to save money by burning through their inventories rather than buying new chips. "If you're holding Intel today, it's because this is a leading industry player with a great balance sheet and longer-term it will really look great," said Walter Todd, portfolio manager at Greenwood Capital Associates. "But 2009 for Intel, and others in technology, will be a very rough earnings year."