Intel Drops Annual Earnings Prediction by $1 Billion

Intel has reduced its earning predictions for Q4 by $1 billion, putting the blame squarely on the shoulders of the recent flooding in Thailand and the resulting hard disk drive (HDD) shortage.

Initially the chip giant claimed it would be making around $14.7 billion throughout this quarter. Now, according to Tech Crunch it's around $13.7 billion, plus or minus $300 million. This is hardly a poor turnaround, but a drop of just under 10 per cent in revenue is quite a big hit for any company.

Of course Intel couldn't announce this though without pointing the finger - got to say something to the stock holders right? While the floods causing shortages in the hard drive market have had some repurcussions, Intel has placed the blame for the revenue shortage totally at the feet of the flooding. So far there has been some sales shortage and a few price increases for hard drives so it's not beyond the realm of possibility.

This is a little surprising though, as Intel should have had a pretty strong quarter. Ultrabooks are selling well and AMD's poor launch of Bulldozer chips should have led many early adopters going for the Sandy Bridge E chips - though admittedly some could be waiting for Ivy Bridge since that processor line will show up in the first half of 2012.

Hard drive supplies are set to be below normal for a few more months at least as manufacturing facilities affected by the floods are undergoing repairs. However, by mid Q2 2012 things should be back to normal so Intel is expected to be able to make up that missing billion. Never fear guys.