NEW YORK (dpa-AFX) – Intel’s lower annual targets gave the chip giant’s shares a price debacle before the weekend. Shares in New York collapsed by more than 11 percent on Friday, falling to their lowest level in almost five years. Analysts found harsh words for the recent business development and the prospective statements of the stock market darling of the 2010s.
After a slump in sales and red numbers in the past quarter, the company conceded the annual targets and expects lower sales and profits than three months ago. One trigger was the decline in revenue from the PC business by a quarter to 7.7 billion US dollars (7.6 billion euros). The operating result even collapsed by 73 percent. In the case of chips for data centers, sales fell by 16 percent to 4.6 billion dollars. The operating profit melted from almost 2.1 billion to only around a tenth of that.
Analyst Stacy Rasgon from the Bernstein investment house called Intel’s profitability “terrifying” and the new annual targets “nasty”. The report for the second quarter was “the worst thing he’s seen in his career” – and he started his job during the global financial crisis. Sales and earnings per share would have undercut even the most pessimistic forecasts.
Intel’s earnings guidance for the current quarter of $0.35 per share also falls well short of market expectations of $0.82. The same applies to the new, reduced targets for the year as a whole. The weakness stems not only from the PC segment, but also from the business with data and computer centers. It seems as if competitors are inflicting high market share losses on Intel here.
From an investor’s perspective, the past 15 months have been a difficult ordeal. In April of last year, the shares had just missed their highest level since 2000 at prices of almost 70 dollars, since then the price has almost halved. In this stock market year alone, there has been a price loss of more than 30 percent./bek/la/he
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