Intel’s Numbers Worse Than Feared

Shares of Intel sank to a new 52-week low after the close on Thursday after the chip giant delivered guidance that was even worse than feared.

Intel said it is now expecting third-quarter revenues of $8.3-$8.6 billion, below analysts’ estimates of $8.9 billion, and below even the reduced estimates that some analysts began putting out earlier this week, as the company was buffeted by rising inventories and falling demand and margins.

“Worldwide demand for Intel Architecture products is trending below previous expectations driven by lower than expected end demand along with customer reductions in component inventory levels,” the company said in a statement. “Communications revenue is weaker than anticipated primarily due to lower than expected growth in flash memory shipments.”

In a conference call following the announcement, Intel CFO Andy Bryant said weak consumer demand spurred by a global economic slowdown was the main cause of the company’s woes.

Intel also cut gross margin guidance for the third quarter from 60% to 58%, and reduced full-year margin guidance by a similar amount, a hint that the current softness could stretch into the fourth quarter. The company also cut its planned third-quarter spending from $2.5 billion to $2.4 billion.

Shares of Intel fell 7% after hours to around $20, below the stock’s previous 52-week low of $20.86. Chip and chip equipment stocks fell broadly after hours. Shares of Intel have fallen more than 35% in 2004, as the technology spending recovery has turned more cautious.

Stocks surged during the day despite a rise in oil prices and weekly unemployment claims and a drop in productivity. On the plus side, factory orders improved. August employment data will be released Friday morning, and analysts are hoping for 150,000 new jobs.

The Nasdaq surged 23 to 1873, the S&P 500 rose 12 to 1118, and the Dow gained 121 to 10,290. Volume declined to 1.12 billion shares on the NYSE, and 1.21 billion on the Nasdaq. Advancers led 23-9 on the NYSE, and 20-10 on the Nasdaq. Upside volume was 85% on the NYSE, and 79% on the Nasdaq. New highs-new lows were 161-12 on the NYSE, and 58-31 on the Nasdaq.

Nortel slipped after delaying its financial restatements once again.

Computer Access soared 53% on news that it will be acquired by LeCroy .

Merisel climbed 10% on a share buyback.

Intersil fell 6% on a downgrade.

And Microsoft edged higher and Apple declined after the software giant launched a music download service.