Intel lowers Q3 expectations

Intel has lowered its Q3 revenue expectations, sparking fears that the IT industry is headed for more trouble.

Intel has lopped off about $1 billion from the anticipated $14 billion it thought it would pull in this quarter. While a billion here and a billion there does not make much odds on Chipzilla’s budget, there are worries among analysts that hairline cracks are appearing in the industry.

Both HP and Dell have lowered their earnings outlooks and the industry is starting to look like it is freezing up.

Of course, those who see the glass as half full think that the slowdown might be because organisations and consumers are holding back on buying PCs until Windows 8 is released this October.

The evidence for this approach is that demand for server processors is still good. Any slow down appears to be in the home PC area.

There are also those who claim that the home PC market is all moving to tablets and smartphones, although at the moment the figures do not back this up.

According to the Wall Street Journal, analysts are still optimistic about Intel.

It found a FactSet report which expected Intel’s sales sales to grow roughly six percent on average over the next two years, after not growing in 2012. Gross margins are expected to stay near 62 per cent.

Intel shares dropped about four percent on the news of the revenue warning. Intel will release its third quarter figures on 16 October.