Intel Starts its Warning Cycle (INTC)

Intel Starts its Warning Cycle (INTC)


Intel Corp (INTC) announced late Wednesday that it now expects sales of $9 billion in the last three months of the year, below previous expectations of $10.1 billion-$10.9 billion.

The company is specifically citing “significantly weaker than expected demand in all geographies and market segments”. There is also a reluctance from PC makers to buy new chips as they work through existing inventory.

The Bottom Line
We had removed shares of Intel Corp (INTC) from our “Recommended” list back on Sept.9, when the stock was trading at $20.97. We had added the stock on our “Recommended” list back in early August when it was at $23. The company has a dividend yield of 4.14%, based on last night’s closing stock price of $13.52. We would not be surprised if the stock shows some resilience here, as the company’s 4% yield is certainly attractive. From a technical standpoint, the stock may have some downside to the $9 level if the future quarters follow this one’s performance. Looking at the stock’s history, the warnings do come in bunches, so we would not be surprised to see further sales deterioration in early 2009 as well. Investors looking for a long-term play probably can take a bit of a taste here, but we are thinking the shares will likely get cheaper.

Intel Corp (INTC) is not recommended at this time, holding a Rating of 3.2 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.