RealTime IT News

Intel Misses The Mark

Intel had some tough news for the chip sector late Thursday, lowering revenue guidance and cutting capital spending projections.

Intel said it now expects fourth-quarter sales of $10.4-$10.6 billion, below Wall Street's $10.61 billion estimate. The company also said that capital spending "is expected to be below the midpoint of the previous expectation of $5.9 billion, plus or minus $200 million," bad news for chip equipment companies. Gross margin expectations of 63 percent stayed the same.

On a conference call, Intel CFO Andy Bryant said revenue growth was hit by rising inventories and chip capacity constraints. The inventory issue should be resolved soon, but the capacity constraints that have plagued the company for much of this year could continue into next year.

On capital spending, Bryant said Intel isn't cutting its CapEx plans, but had simply over estimated costs.

Intel shares fell 2.7% after hours on top of a 1.7% drop during the day. The chip sector lost 1.5% in late trading.

Stocks fell Thursday as oil and natural gas prices surged on news of tight supplies.

The Nasdaq lost 5 to 2246, the S&P 500 slipped 1 to 1255, and the Dow fell 55 to 10,755. Volume rose to 2.18 billion shares on the NYSE, and 1.97 billion on the Nasdaq. Advancers led 18-14 on the NYSE, and 15-14 on the Nasdaq. Upside volume was 52% on the NYSE, and 40% on the Nasdaq. New highs-new lows were 138-39 on the NYSE, and 106-38 on the Nasdaq.

Texas Instruments , National Semi , Xilinx , Qualcomm and Ciena all ended lower despite solid earnings news, as their stocks got hit by profit-taking and selling pressure from the broader market.