Intel describes how credit crunch can hurt

Intel added a new warning into its 10Q about the risks it faces due to the economic downturn.

Intel added warnings in its quarterly filing with the U.S. Securities and Exchange Commission about how the deteriorating economic conditions worldwide may negatively affect its business.

"The recent financial crisis could negatively affect our business, results of operations, and financial condition," Intel wrote in its 10Q filing, published by the SEC on Friday.

Intel spells out how the credit crunch in particular could affect the company: "There could be a number of follow-on effects from the credit crisis on Intel's business, including insolvency of key suppliers resulting in product delays; inability of customers to obtain credit to finance purchases of our products and/or customer insolvencies; counterparty failures negatively impacting our treasury operations; increased expense or inability to obtain short-term financing of Intel's operations from the issuance of commercial paper; and increased impairments from the inability of investee companies to obtain financing."

The warnings echo nearly identical language in Intel's third-quarter earnings report, released Oct. 14.

During a conference call two weeks ago to discuss the earnings report, executives focused mainly on how the worldwide economic problems might affect demand for Intel products, without discussing much about how the credit crisis might affect its suppliers or companies Intel invests in. The executives said they were concerned but were also optimistic.

"I'm of the opinion that technology will do well during this downturn, for the simple fact that we sell tools of productivity," said Paul Otellini, Intel's president and CEO, during the call.

In 10Q filings, public companies typically detail risks, sometimes dire, that they face. But it's notable that Intel has added new language about the economic downturn.

In the filing, Intel also reiterated plans to issue an unusual mid-quarter business update on Dec. 4, in part because the company has struggled to predict demand given the economic conditions. "The higher chipset revenue we experienced in the third quarter would normally be a sign that customers are building ahead of a strong fourth quarter," the company wrote in the 10Q. "However, with the current macroeconomic environment, it is hard to discern what demand will be for the fourth quarter of 2008."

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Nancy Gohring

IDG News Service
Topics: financial crisis, economy, intel
Comments are now closed.

Latest News Articles

Most Popular Articles

Follow Us

GGG Evaluation Team

Kathy Cassidy

STYLISTIC Q702

First impression on unpacking the Q702 test unit was the solid feel and clean, minimalist styling.

Anthony Grifoni

STYLISTIC Q572

For work use, Microsoft Word and Excel programs pre-installed on the device are adequate for preparing short documents.

Steph Mundell

LIFEBOOK UH574

The Fujitsu LifeBook UH574 allowed for great mobility without being obnoxiously heavy or clunky. Its twelve hours of battery life did not disappoint.

Andrew Mitsi

STYLISTIC Q702

The screen was particularly good. It is bright and visible from most angles, however heat is an issue, particularly around the Windows button on the front, and on the back where the battery housing is located.

Simon Harriott

STYLISTIC Q702

My first impression after unboxing the Q702 is that it is a nice looking unit. Styling is somewhat minimalist but very effective. The tablet part, once detached, has a nice weight, and no buttons or switches are located in awkward or intrusive positions.

Resources

Best Deals on GoodGearGuide

Compare & Save

Deals powered by WhistleOut
WhistleOut

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?