(Reuters) – S&P Global Ratings on Tuesday downgraded chipmaker Intel Corp’s credit rating to “BBB” from ‘BBB+’, citing slow business recovery and uncertainty following management changes.
The chipmaker icon’s revenue for the first nine months of this year, which was roughly flat year-over-year at $38.84 billion, was below the ratings agency’s expectations, S&P Global said.
The departure of CEO Pat Gelsinger, who was crucial to Intel’s integrated manufacturing strategy, also adds uncertainty to the execution of the company’s turnaround plan, S&P Global said.
“Despite the company’s assurances that the business strategy will remain largely unchanged, we still expect some degree of change under the new CEO, which could add to the uncertainty surrounding the timing of the business turnaround,” the rating agency said.
Gelsinger’s departure came well before the completion of his four-year roadmap to restore the company’s lead in making the fastest and smallest computer chips, a crown it lost to Taiwan Semiconductor Manufacturing Co.
However, S&P Global kept the business outlook ‘stable’ to reflect the view that Intel will experience growth next year after a modest recovery.
(Reporting by Leroy Leo in Bengaluru; Editing by Krishna Chandra Eluri)