Updated to add reference to analyst downgrade.
Intel issued a fourth-quarter warning on Wednesday, noting its financial performance will be less than previously forecast and comes a day after downgrades by analysts.
The chip giant is scaling back its forecast as its revenues come in "significantly weaker" than expected across all its market segments and the countries that it operates in. Gross margins, as a result, also received a revised outlook.
Intel, which released its quarterly warning after the markets close, saw its shares drop 7.47 percent in after hours trading. During the regular trading session Wednesday, Intel had ended the day at $13.93 a share, down 2.94 percent.
Intel lowered its fourth-quarter revenue outlook to between $8.7 billion and $9.3 billion, compared with its previous guidance of $10.1 billion to $10.9 billion.
And its fourth-quarter gross margins are anticipated to come in around 55 percent, versus its earlier forecast of approximately 59 percent.
In a cost-cutting move, Intel also said it plans to reduce its research and development spending and its general administrative costs to $2.8 billion in the quarter, versus a slightly higher $2.9 billion. Overall spending for the year is expected to come in at $11.4 billion, compared with its previous forecast of $11.5 billion.
Intel said those are the only unexpected changes it expects at this time.
One analyst, Craig Berger of Friedman Billings Ramsey, was ahead of the game, putting out a research note Tuesday that cut Intel's revenue forecast to $9.8 billion from $10.4 billion.
Wall Street is expected to take another slice at Intel's earnings, now that the chipmaker has issued a revised lower forecast. Intel said it expects to report its fourth-quarter results on January 15.