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  1. Technology
November 21, 1988


By CBR Staff Writer

Intel Corp has been making too many 80386s, and as a result, its fourth quarter turnover will be approximately 10% below the record $785m reported for the third quarter, the company says. Earnings per share are now expected to drop to between $0.40 and $0.50, against 55 cents a share in the 1987 fourth quarter – but 14 cents of that was accounted for by tax credits; the company had said that the fourth quarter sales would be flat with the third quarter, and that earnings per share would be down – and the new forecast is below what the financial community had been forecasting for the company. Expanding on the reason for the shortfall, Intel says that it is down to a continuing OEM inventory correction affecting the 80386 microprocessor and companion chips. In recent quarters, Intel rapidly expanded production of the parts to meet demand, and while we are experiencing almost no returns of these products, our OEM customers are pushing out more of their purchases than had been expected, said chief executive Andy Grove, president and chief executive officer. We have been talking closely with our customers and they indicate that their business outlook is good, Dr Grove added. We think we will work our way through this situation by the second quarter of next year and expect growth to resume at that time, he concluded optimistically.

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