Intel's credit rating downgraded by Fitch on demand challenges
(Reuters) -Fitch downgrading U.S. chipmaker Intel's credit rating by one notch on Monday, according to a note by the ratings agency, which assigned a negative outlook to Intel's rating.
Fitch downgraded Intel to BBB from BBB-plus, placing it just two notches shy of junk credit status.
The downgrade follows Fitch's assessment that Santa Clara, California-headquartered Intel faces heightened challenges maintaining demand for its products. Fitch cited growing competition from peers such as Dutch rival NXP Semiconductors, Broadcom Inc and Advanced Micro Devices.
"Credit metrics remain weak and will require both stronger end markets and successful product ramps, along with net debt reduction over the next 12-14 months" for Intel to recover its recent ratings, Fitch analysts wrote on Monday.
Fitch added that while Intel holds a better market position than other similarly rated peers, its financial structure is relatively weaker and it faces "higher execution risk."
Intel still enjoys a strong market position in the provision of PCs and traditional enterprise servers, Fitch noted, while warning the company faces heightened PC competition from Qualcomm and AMD.
Intel will need to ramp up its PC shipments while also reducing its balance sheet debt to recover its previous credit ratings, Fitch said.
The ratings agency called Intel's liquidity profile "solid," which as of June 28 consisted of a $21.2 billion mix of cash, cash equivalents and short-term investments, as well as an untapped $7 billion credit revolver. It also had an undrawn $5 billion, 364-day revolver that will come due in January 2026, Fitch said.
Fellow ratings agency S&P Global similarly downgraded Intel's credit rating to BBB from BBB-plus in December, while Moody's Ratings downgraded its senior unsecured debt's rating in August last year.
(Reporting by Matt Tracy; Editing by Leslie Adler)
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Star
2 hours ago
- The Star
US agency approves OpenAI, Google, Anthropic for federal AI vendor list
WASHINGTON (Reuters) -The U.S. government's central purchasing arm on Tuesday added OpenAI's ChatGPT, Google's Gemini and Anthropic's Claude to a list of approved artificial intelligence vendors to speed use by government agencies. The move by the General Services Administration, allows the federal government advance adoption of AI tools by making them available for government agencies through a platform with contract terms in place. GSA said approved AI providers "are committed to responsible use and compliance with federal standards." (Reporting by David Shepardson and Harshita Mary Varghese in Bengaluru)
The Star
2 hours ago
- The Star
Trump says he will ‘substantially' raise tariffs on India over Russian oil purchases
US President Donald Trump said he will substantially raise tariffs on India. - Photo: Reuters WASHINGTON: President Donald Trump said he would raise tariffs on Indian goods "over the next 24 hours' in response to New Delhi's continued purchases of Russian oil. Trump announced a 25% duty on India's exports to the US and has threatened repeatedly to increase that rate to punish the country for buying Russian energy, an effort to pressure Russian President Vladimir Putin to end the war in Ukraine. "We settled on 25% but I think I'm going to raise that very substantially over the next 24 hours, because they're buying Russian oil,' Trump said Tuesday (Aug 5) in a CNBC interview. "They're fueling the war machine. And if they're going to do that, then I'm not going to be happy.' Trump has escalated his fight with India over trade, unilaterally imposing a tariff rate after months of negotiations failed to secure a deal. He accused New Delhi of refusing to ease access for American goods and criticizing its membership in the BRICS group of developing economies. The US president has also set an Aug. 8 deadline for Russia to reach a truce with Ukraine, with the administration threatening so-called secondary sanctions on countries that purchase energy from Moscow. Ukraine's allies say those purchases prop up Putin's war effort. Trump in the interview said that if energy prices went down it would undercut Putin's ability to continue his invasion of Ukraine - now in its fourth year. "If energy goes down low enough, Putin's going to stop killing people,' Trump said. "If you get energy down another US$10 a barrel, he's going to have no choice, because his economy stinks.' The Indian government has indicated it intends to continue talks with the US in hopes of securing lower tariffs. It has also called Trump's threat over energy purchases unjustified. India is considering ramping up natural gas purchases from the US and increasing imports of communication equipment and gold. - Bloomberg
The Star
2 hours ago
- The Star
Trump says ‘getting very close' on extending China trade truce
A preliminary deal between the US and China is set to expire on Aug 12. - Photo: Reuters WASHINGTON: US President Donald Trump said he was "getting very close to a deal' with China to extend the trade truce that saw the two countries agree to reduce tit-for-tat tariff hikes and ease export restrictions on rare earth magnets and certain technologies. "It's not imperative, but I think we're going to make a good deal,' Trump said in an interview with CNBC, adding that the US was "getting along with China very well.' Still, Trump downplayed the notion that he was eager for a meeting with Chinese President Xi Jinping, saying he would only want to see his Chinese counterpart as part of an effort to conclude trade negotiations. "I'll end up having a meeting before the end of the year, most likely, if we make a deal,' Trump said. "If we don't make a deal, I'm not going to have a meeting.' "It's a 19-hour flight - it's a long flight, but at some point in the not too distant future, I will,' Trump added. A preliminary deal between the US and China is set to expire on Aug. 12. That initial truce eased worries of a tariff war that threatened to choke off bilateral trade between the world's two largest economies and also gave the countries more time to discuss other unresolved issues such as duties tied to fentanyl trafficking. Last week, US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng met in Stockholm - the third round of trade talks between the US and Beijing in less than three months. While Chinese officials and the Communist Party's official newspaper had signaled satisfaction with the Stockholm talks, the pact remained fragile. Bessent had said that any agreement to extend the arrangement would be up to Trump. - Bloomberg
