Intel Takes Big Charge For Quarter - InformationWeek

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Intel Takes Big Charge For Quarter

Chipmaker expects revenue to be between $8.5 billion and $8.7 billion for the fourth quarter, which ends Dec. 27.

Intel on Thursday raised the low end of its revenue estimate for the fourth quarter. But the chipmaker said it expects to take a hefty fourth-quarter goodwill impairment charge related to its Wireless Communications and Computing Group. The $600 million charge comes from the company lowering its expectations for this business unit.

Some of the group's products are shipping late, which prevented Intel from gaining the market share it wanted, said Intel chief financial and enterprise services officer Andy Bryant during a Thursday teleconference. "We've come to the conclusion that we have to take a charge, particularly over the DSPC acquisition."

Intel in 1999 spent $1.6 billion to buy DSP Communications Inc., a supplier of chipsets, reference design, software and other technologies for wireless handsets. DSPC personnel and assets have since become part of the Wireless Communications and Computing Group.

One of the Intel's few weak points during the third quarter was continued loss related to the Wireless Communications and Computing Group. Operating loss for the business was $124 million on revenue of $450 million. For the third quarter a year ago, the loss was $30 million on revenue of $586 million.

For the fourth quarter, which ends Dec. 27, Intel expects revenue to be between $8.5 billion and $8.7 billion, as compared to the previous range of $8.1 billion to $8.7 billion. Spending on research and development is expected to be $4.4 billion for the year, compared with the previous expectation of $4.3 billion.

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