How To Shoot Yourself In Your Leg

Posted by Kris | Saturday, November 01, 2008 | | 0 comments »

Intel Says Financial Crisis Could Hurt Its Business 

The bell weather for the tech stocks Intel is shooting itself at its leg for admitting that things arent so rosy after all. During the Q3 earnings, Intel reported a healthy increase of earnings. Nevertheless, the CEO acknowledges that the outlook is very uncertain. But this latest gloomy outlook came when Intel is starting an new uptrend raising from the low of the year ~USD 13 to ~16 at the time of writing. To make things worst, Intel is on a investing spree , investing in start up alternative energy companies in China & Taiwan. People are getting optimistic again , pointing to USD20 by the end of the year. One thing they forget is that it touched the lows of USD13 in such ease. Nevertheless, it is a responsible company , giving people chance to dump their stocks during this troubled time.

You don't want to have a management team like LEHMAN BROs who still said everything is fine while the house is being burned down.

By Andreas Hippin

Oct. 31 (Bloomberg) -- Intel Corp., the world's largest computer-chip maker, said the global financial crisis could hurt its business.

``The recent financial crisis could negatively affect our business, results of operations and financial condition,'' Santa Clara, California-based Intel said in the risk factors section of its 10-Q quarterly filing with the Securities and Exchange Commission today.

Intel posted third-quarter profit on Oct. 14 that beat some analysts' estimates and said sales may rise in this period on demand for laptops, alleviating concern that the crisis hitting the world's banking system will halt demand for personal computers. While corporate PC sales have slowed, revenue from laptop processors, which sell for more than desktop chips, jumped 20 percent last quarter.

``Insolvency of key suppliers'' and ``inability of customers to obtain credit to finance purchases of our products and/or customer insolvencies'' are among the potential results of the crisis, Intel said in today's filing.

Intel prepaid $1 billion under a forward purchase agreement to Lehman Brothers OTC Derviatives Inc. to purchase its common shares, the company said. As Lehman failed to deliver, Intel foreclosed on $1 billion in cash received as collateral.

``There was no impact to our results of operations as a result of this agreement,'' Intel said.

Intel shares traded in Germany dropped 44 cents, or 2.7 percent, to the equivalent of $15.73 at 12:08 p.m. in Frankfurt, from the close of $16.17 on the Nasdaq Stock Market yesterday.