Intel stock down after disappointing Q4 earnings
Intel shares are down after a Q4 revenue miss.
Intel stock dropped after a fourth quarter earnings report that missed estimates. The semiconductor company’s shares are plummeting down 3%.
Why is Intel stock down?
Intel has struggled for the last few months since the company is without a chief executive officer(CEO) since, Brian Krzanich, was forced out seven months ago for having a relationship with an employee. The corporation’s revenue was $18.66 billion, less than the $17.05 billion that Wall Street expected.
Interim CEO, Bob Swan, said that the US-China trade war also had an impact on Intel’s profits.
‘Since that time trade and macro concerns, especially in China, have intensified’, said Swan.
In addition to not having a CEO, the corporation has struggled because of sluggish sales in China. Its cloud provider server chips have declined in sales.
‘Cloud service providers shifted from building capacity to absorbing capacity and the NAND[technology] pricing environment has further deteriorated. Those incremental headwinds are impacting our revenue expectations and slightly reducing our operating margin percentage forecast,’ said Swan.
Intel was also indirectly impacted by Apple’s weak Q1 guidance. The corporation gets most of its modem revenue from Apple, and the modem revenue declined by $200 million.
What’s next for Intel stock?
Despite the negative news about Intel stock, Swan is optimistic that the tides will turn once there is a new CEO.
‘I'm convinced the board will close on its new CEO in the near future, said Swan. He asserted that Intel employees ‘will not be distracted by the void’.
Jeffries Financial Group is less optimistic about Intel’s profits in the future.
‘We are bullish on semis in part because consolidation is driving pricing power and higher margins, but we think the opposite will happen to Intel over the next 12-to-24 months’, said Jefferies Financial Group.
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