Intel withdraws 2020 forecast on ‘significant’ uncertainty caused by Covid-19 pandemic

The world’s largest semiconductor maker reported a 23 per cent jump in first-quarter revenue and better-than-projected profit, bolstered by demand for chips that run the laptops and server machines companies need to keep people working from home. Though it gave an optimistic second-quarter sales target, Intel’s profit outlook fell short of estimates, sparking concerns that a spending slowdown will drag on business for the rest of 2020.

Sales in the current period will be about US$18.5 billion, the Santa Clara, California-based company said in a statement Thursday. Analysts estimated US$18.08 billion on average, according to data compiled by Bloomberg. Net income will be about US$1.04 a share, compared with Wall Street expectations of US$1.11.

“Investors were caught off guard” by the profit forecast, Logan Purk, an analyst at Edward D. Jones & Co., said. “When they’re crushing it on the top line but whiffing pretty hard on the earnings, it’s a shock.”

Still, the soaring first-quarter sales fed into concerns that demand may have peaked early in the year, with Intel and its customers girding for the worst recession since the 2008 financial crisis. In the report, the chip maker said it expects weaker demand from government and corporate clients in the second half of 2020.