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Intel Feeds the Bear

By Alexei Oreskovic
TheStreet.com Senior Writer
1/15/2008 4:32 PM EST

http://www.thestreet.com/_yahoo/newsanalysis/techsemis/10398850.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA

SAN FRANCISCO -- Intel (INTC - Cramer's Take - Stockpickr - Rating) grew its bottom line 50% in the fourth quarter, but offered a disappointing sales forecast for the current quarter.

Shares of Intel immediately sank nearly 14% to $19.54 in extended trading Tuesday.

Intel's top line for the fourth quarter fell slightly short of Wall Street expectations, growing 10.5% year-over-year to $10.7 billion. The average analyst expectation called for $10.8 billion in revenue.

The Santa Clara, Calif., chipmaker said it earned net income of $2.3 billion, or 38 cents a share, in the three months ended Dec. 29, compared with net income of $1.5 billion, or 26 cents a share, at this time last year.

Intel's EPS included 2.5 cents of restructuring and asset impairment charges relating to its NOR flash memory business.

Analysts polled by Thomson Financial were looking for 40 cents a share, excluding the charges.

Intel grew its gross margin to 58%, compared with 52.4% in the third quarter, and 49.6% in the year-ago period.

That gross margin will dip back down to 56%, plus or minus a couple of points in the first quarter, Intel said.

The chipmaker projected that sales in the first quarter would range between $9.4 billion and $10 billion. The average analyst expectation had called for $10 billion in first-quarter sales with EPS of 34 cents.