Intel (INTC) already warned that Q4 sales were terrible: Almost a month ago, the company cut its Q4 revenue guidance by more than 10%, citing "significantly weaker than expected demand in all geographies and market segments." Will it ring the alarms again?
FBR analyst Craig Berger thinks it might: After rival AMD (AMD) preannounced that sales fell 25% quarter-over-quarter, "the magnitude of AMD's miss raises the risk that Intel will also lower 4Q revenues below its already revised range of –9% to –15%," Berger says in a note today. (Though Berger thinks Intel's product line is "much stronger" than AMD's.)
Intel could also announce a big headcount reduction: Berger's "checks" suggest that Intel could announce it's firing up to 10% of its staff, including manufacturing and non-manufacturing jobs. "Ultimately, we think the reduction in workforce could be to 6%-7% of total headcount (5000-6000 employees)," he says. He also expects Intel to announce there won't be annual "Focal" raises this year, and that employee bonuses will be down this year.
Berger thinks Intel could save as much as $1 billion a year from those actions, saving the company about 13 cents in EPS a year.
See Also:
AMD Warns Of 25% Drop In Revenue. Blame Crappy Economy, Product Line
Intel Slashes Q4 Guidance: Demand Weaker Than Expected, Everywhere
Forrester Research CEO: Intel Revenue Cuts Not That Big A Deal
