Santa Clara (CA) – Intel cut its fourth quarter revenue target for the second time, stating that it will take about $1.2 billion in impairment charges, including a $950 million charge for the decreased value of its WiMax investment in Clearwire.
Intel said that it now expects its Q4 revenue to have declined by about 20% sequentially and 23% year over year. The new guidance is worse than the November 12 adjustment which expected revenue to be down 12% sequentially and 16% year over year. The company said it will report fourth quarter revenue of about $8.2 billion.
This number is not only well below the Q4 2007 result of $10.7 billion , it is also significantly below the Q4 2000 result – the beginning of the dotcom bust – of $8.7 billion.
Intel said that its revenue is impacted by “further weakness in end demand and inventory reductions by its customers in the global PC supply chain.” As a result of the year-end market price of Clearwire stock, Intel will impair the value of its investment, resulting in a non-cash charge to fourth-quarter earnings of approximately $950 million.
The company now expects the net gain or loss from equity investments and interest and other to be a loss of between $1.1 billion and $1.2 billion versus a previous expectation of a loss of approximately $50 million. Also, the company said that it will post restructuring and asset impairment charges of approximately $250 million.