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US sanctions and COVID-19 affect Intel’s business

Quarterly sales and profit are significantly lower, the 4th quarter is getting worse. Although Intel still expects a record year, the share is losing sharply.

“The pandemic has led authorities to impose numerous unprecedented measures to try to contain the virus. These measures have and could continue to affect our employees and businesses, the businesses of our customers, and those of our suppliers and partners,” warns Intel in its quarterly report. In the three months to the 26. of september Intel mad less profit than it did a year ago. Management expects an even stronger decline in the current quarter.

Intel CEO Bob Swan had already expected an even worse course in the third quarter. He is confident that Intel will set a new sales record in the full year 2020, although the outlook for the fourth quarter is well below the result of the third quarter. This is evident from Intel’s publications on Thursday evening.

The numbers

Intel converted $18.3 billion in the third quarter, of which $5.1 billion made operating profit and $4.3 billion in net profit. There was the strongest drop in the Group’s Internet of Things division, where sales were one-third lower than a year ago. In addition to the coronavirus pandemic, this is also due to new US sanctions that restrict Intel’s business with customers in the People’s Republic of China.

The Programme Solutions Group, which deals, for example, with programmable chips and artificial intelligence, has implemented almost a fifth less. The data storage division has had to accept eleven percent sales decline, and the data center division seven percent. The smallest designated group unit has increased by two percent, the Israeli company Mobileye, which offers optical detection systems for automotive.