Intel raises Q3 guidance as industry recovers
updated 12:20 pm EDT, Fri August 28, 2009
Intel raises guidance
Intel has revised its third-quarter revenue expectations, anticipating a resurgence in demand for computer components. The company now forecasts revenues to fall between $8.8 billion and $9.2 billion, up from the previous guidance ranging from $8.1 billion to $8.9 billion. Gross margin targets remain unchanged, although the numbers are expected to reach the upper end of the previously-announced range.
The chip-maker struggled in the fourth quarter of 2008, as the economic recession slashed net profits by 90 percent. Investments in Clearwire contributed to a net loss of over $1 billion, although sales of Atom chips showed a 50 percent increase.
The Santa Clara-based company early this year announced plans to consolidate factories in an attempt to restructure manufacturing operations to reflect soft sales. Three factories in Malaysia and the Philippines were shuttered, along with a wafer production operation at the D2 facility in California. Rival AMD announced similar plans to trim its workforce by 1,100 employees, while reducing even the CEO's salary by 20 percent.
Intel CEO Paul Otellini contributes the recent turn-around to "improving conditions in the PC market segment." Despite the optimism, overall performance across the entire industry remains uncertain. Several research firms and analysts expect overall PC shipments in 2009 to see the largest drop since 2001. Some expect sales to recover sometime in 2010, although other analysts are uncertain if the global PC market has already reached its lowest point.
