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Intel Q3 sales to barely meet guidance - report

Notebook PC downturn, inventory overload to blame

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When Intel updates its Q3 financial performance tomorrow, it will revise its revenue forecast toward the bottom end of the range it announced in July.

So reckons investment house SG Cowen Securities (SGCS) in a report issued to investors yesterday: "We believe the consensus estimates for Q3 could be trimmed following a potentially disappointing mid-quarter update."

In July, Intel expected Q3 revenues to fall somewhere between $8.6bn and $9.2bn. But slow notebook sales and an inventory build-up will push revenues down to the lower figure, SGCS believes. It puts Intel's sales at $8.59bn, still up seven per cent on Q2's $8.05bn and 10.1 per cent on the $7.8bn it reported for Q3 2003.

"We expect Intel to lower the midpoint of it revenue range and possibly lower its gross margin guidance," the report says. "Our view is based on recent channel checks that suggests demand for notebook PCs remains tepid and that Intel is aggressively reducing prices to reduce excess inventories."

Intel cut prices on 22 August, but further cuts are anticipated in the Autumn to boost demand for its i915 chipset family, Grantsdale. ®

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