January 21, 2009, 12:42 am
Intel Memo Hints At Possible Q1 Loss
Posted by Eric Savitz
Could Intel (INTC) drop into the red in the March quarter?
In a memo to employees, Bloomberg reports, Intel CEO Paul Otellini wrote that after 87 quarters of profits, the first quarter is “too close to call.”
In reporting fourth-quarter results last week, Intel declined to give formal first quarter guidance, but said that for “internal planning purposes” the company is assuming revenue for the quarter of $7 billion, which would be down almost 15% from the $8.2 billion posted in Q4, and off 28% versus a year earlier. Intel also cautioned that it expects gross margin for the quarter to drop to the low 40s from 53.1% in Q3 due to lower fab utilization and other factors.
The Street is looking for March quarter profits of 4 cents a share.
According to the memo, the failure to provide a forecast was a first in Otellini’s 34-year career at the company.
Bloomberg reports that the memo also said there will no budget for merit pay or promotions, and that the company will only refill vacant jobs on a selective basis. According to the wire service, Intel plans to slow some production, forcing the closure of some sites and causing the relocation of some manufacturing workers. |
