DAVID HAFFENREFFER, CNN ANCHOR: Well, our top business story this morning, an after-the-bell bombshell that didn't quite explode. Intel warned that fourth-quarter revenues will be well below expectations.</s>DEBORAH MARCHINI, CNN ANCHOR: Following the news, shares of the top chip maker tumbled $2 before bottoming out and climbing back to 32 1/2 on very heavy volume.</s>HAFFENREFFER: Up and coming competitor Advanced Microdevices, which has been locked in a fierce market share battle with Intel, fell fractionally. Our Allan Chernoff now reports on the latest tech trouble.</s>ALLAN CHERNOFF, CNN CORRESPONDENT (voice-over): After warnings of slowing sales from makers of personal computers, it was inevitable that Intel would feel the pinch as well. Blaming large cancellations by customers worldwide, Intel said fourth quarter revenues would likely be flat. Usually the fourth quarter is Intel's best of the year. The company had been expecting growth of four to eight percent. The Nasdaq tumble that has taken down Intel's stock has also hurt Intel's investments, so the company's investment income for the quarter is now forecast at $675 million, down from previous guidance of $950 million. But it is not all bad news from Intel, anticipating a slowdown Intel has been cutting expenses in its factories. Companywide expenses are now forecast to be flat for the quarter, instead of rising six to eight percent. That should allow Intel to hold its gross profit margin at 63 percent, what investors had been expecting, and that cheered some analysts.</s>JOE MOORE, GOLDMAN SACHS: To the extent that Intel has recognized it early and, clearly, in terms of some of its expense control, has shown some controls, mean that maybe it mitigates the impact a little bit into the first part of next year.</s>CHERNOFF: At one point this year, Intel was the best performing stock in the Dow Jones Industrial Average, but since the beginning of September, it has lost more than half its value. Allan Chernoff, CNN Financial News, New York.
Intel Warns of Fourth-Quarter Revenues Well Below Expectations