Intel cuts outlook as hard-drive shortage bites

The company has warned its fourth-quarter sales will be down compared to its predictions, blaming the impact of hard-drive shortages on the PC supply chain
Written by Larry Dignan, Contributor on

The hard-drive shortage caused by floods in Thailand is backing up the supply chain and Intel's revenue will fall well below expectations as a result.

Intel said on Monday that its fourth-quarter sales will be $13.7bn (£8.8bn), give or take $300m. The company had projected fourth-quarter sales of $14.7bn, give or take $500m. Wall Street analysts were looking for sales of $14.65bn and earnings of 69 cents a share. Intel also said gross margins would be lower than expected at 64.5 percent. Wall Street expected 64.96 percent.

"Sales of personal computers are expected to be up sequentially in the fourth quarter," Intel said in a statement. "However, the worldwide PC supply chain is reducing inventories and microprocessor purchases as a result of hard disk drive supply shortages. The company expects hard disk drive supply shortages to continue into the first quarter, followed by a rebuilding of microprocessor inventories as supplies of hard disk drives recover during the first half of 2012."

For more on this ZDNet UK-selected story, see Intel cuts sales outlook, blames hard drive shortage on ZDNet.com.

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