Intel Releases Dismal Earnings Warning

Intel's prior advisory estimated Q4 revenue to be $9 billion, plus or minus $300 million (originally estimated, pre-global recession, to be between $10.1 billion and $10.9 billion). Meanwhile Q4 gross margin was estimated to be 55% +/- 2%, vs. original expectations of 59% +/- 2%.

Wednesday's preliminary figures show revenue of approximately $8.2 billion, down 20% sequentially and down 23% percent year-over-year. Gross market is at the low-end of the prior estimate of 55% +/- 2%.

More info from the press release:

• 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. (see, it's not just your 401K being destroyed)

• Just in its Clearwire investment alone, Intel will take a non-cash charge to fourth-quarter earnings of approximately $950 million.

• Spending (R&D plus MG&A) is expected to be approximately $2.6 billion, lower than the previous expectation of approximately $2.8 billion.

• Restructuring and asset impairment charges are expected to be approximately $250 million, unchanged.

Intel noted that it is currently observing the "pre-earnings quiet period" and that it will not make any further statements prior to Jan. 15th. The stock dropped as much as nearly 7% in early morning trading, but has since recovered somewhat.