Intel sees ‘significant’ business uncertainty

Chipmaker pulls outlook following strong quarterly results

Semiconductor giant Intel has given a look at the effect that the coronavirus pandemic may have on its business in the coming months. And that view is nothing but uncertain.

Intel said as much with its first-quarter report, in which the world’s largest chipmaker said late Thursday that because of the “significant economic uncertainty” brought on by the coronavirus crisis, it was withdrawing its sales forecast for all of 2020. Intel gave a bleak assessment of the impact coronavirus is likely to have on both its own operations and the overall economy.

“It is likely that the current outbreak and continued spread of COVID-19 will cause an economic slowdown, and it is possible that it could cause a global recession,” Intel said in a statement about its business results and outlook. “It is difficult to predict the nature and extent of (coronovirus-related) impacts on demand for our products.”

Intel said that during the first three months of the year, it earned $1.45 a share, excluding onetime items, on revenue of $19.8 billion. Those results topped Wall Street analysts forecasts for a profit of $1.28 a share on revenue of $18.67 billion. Intel said it’s business benefited from companies and consumers making computer purchases and upgrades to better-enable working from home.

Intel also said that for its second quarter, which ends in June, it anticipates earning $1.10 a share, on $18.5 billion in revenue. However, that earnings outlook fell short of analysts’ estimates, and added to concerns about Intel’s business being affected by the coronavirus’ impact on the economy.

Reaction to Intel’s outlook was tepid Friday, with the company’s shares rising just 0.4%, to close at $59.26.

Along with Intel, much of the U.S. stock market ended the week on an upbeat note. The Dow Jones Industrial Average rose 260 points, or 1.1%, to finish at 23,775.27, while the S&P 500 rose 1.4%, to 2,836.74, and the Nasdaq Composite Index ended the day up by 1.7%, at 8,634.52.

Among notable Bay Area companies, Apple shares rose almost 3%, to end the day at $282.97, Tesla climbed 2.8%, to close at $725.15 a share, Facebook shares rose 2.7%, to $190.07, Cisco Systems shares rose 2.2%, to $42.52 and HP rose 2.6%, to close at $15 a share.