Intel profit seems to be uncertain after COVID-19, and consequently, the computer processor giant has withdrawn its profit forecast for 2020. This is after analyzing risks and concluding the second half of the year will be much tougher.
Intel has withdrawn its 2020 projections as uncertainty over the spread of coronavirus grows. The Santa Clara, California based company cited a ‘significant economic activity’ during the lockdown period and the second half of the year, where its revenue is projected to decrease.
Intel profit revisions
The first quarter of the year, however, has been seen the company increase its sales by 23 percent. The lockdown and the working at home policy have resulted in companies stocking laptops for their workers. This has led to a higher demand for intel processors driving the companies sales to $18.5 billion.
Analysts had projected the sales of the company at about $18.08 billion. This increase has also been caused by higher demand for servers due to increase usage of streaming services and video conferencing applications. The servers that run these platforms are expensive and companies have been forced to buy the intel processors in order to meet the growing demand of these services.
Gloomy outlook
Wallstreet projected a price of $1.11 dividend per share. However, the company will pay a dividend of $1.04 per share, way below what was projected. The company shares fell about 5 percent after the withdrawal of the profit projects. The second quarter of the year is also projected to do well in sales.
However, the second half of the year has a much uncertain look, where companies will be coming back to business and looking to cut on costs. Governments and other corporate buyers of the intel products will also have a lower demand for processors. The sales are projected to be lower than the first half.
Intel shares have already lost 1 percent since the beginning of the year. Economists are projecting the US economy may be entering a recession, which would further drive down the shares of the company.
Featured image by Pixabay
