Intel Tumbles on Data Center Sales Decline, Tepid Forecast

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Intel Tumbles on Data Center Sales Decline, Tepid Forecast

(Bloomberg) -- Intel Corp. shares slumped after a surprise drop in data center sales and a tepid forecast added to concern that the company is losing its lead in computer chips.The data center business, a major source of Intel profit, suffered a 10% decline in third-quarter revenue compared with a year earlier after a weak economy hurt sales to large companies and government customers. Sales to cloud computing providers will slow in the current period, Intel said.Falling prices and narrowing profit margins reinforced concern that Intel is losing its lead in chip manufacturing technology, exposing the company to the strongest competition it has faced in more than a decade.During a conference call, Chief Executive Officer Bob Swan said he’s still deciding how much production to outsource. Executives also said the Covid-19 pandemic increased demand for cheaper chips and predicted those headwinds will pass.Cody Acree, an analyst at Loop Capital Markets, said he didn’t accept Intel’s use of the pandemic as a reason for the quarterly revenue decline, citing a boost in demand for PCs during the past few months that wouldn’t have occurred otherwise.“I didn’t hear any answers to the biggest questions,” Acree said.Intel’s stock fell about 10% in extended trading. The company projected that fourth-quarter sales will decline at their worse rate in more than a decade. Gross margin, a key indicator of profitability, will end 2020 below 60% for the first time in seven years, according to In

2020/10/22 finance.yahoo.com/news