Intel provided an update on its second-quarter earnings forecast following the Biden administration's decision to revoke its export license to supply semiconductors to Huawei. The new estimates reveal earnings will be below the midpoint of the $12.5 billion to $13.5 billion range.
Blame game...
A new trend? Blame earnings weakness on Biden policies: here's Intel pic.twitter.com/UjIdBcishc
— zerohedge (@zerohedge) May 8, 2024
In an SEC filing on Wednesday, Intel revealed that the US Department of Commerce's revoking of its license for exports to specific Chinese customers will pressure second-quarter earnings. The company now expects revenue for the quarter to "remain in the original range of $12.5 billion to $13.5 billion but below the midpoint."
Intel added, "For full year 2024, the Company continues to expect revenue and earnings per share to grow year-over-year compared to 2023."
This comes after an overnight report from the Financial Times that said the Biden administration "revoked export licences that allow Intel and Qualcomm to supply Huawei with semiconductors as Washington increases the pressure on the Chinese telecoms equipment company."
People familiar with the situation said the Department of Commerce's latest move was to pressure the supply of chips for Huawei's smartphones.
"We continuously assess how our controls can best protect our national security and foreign policy interests, taking into consideration a constantly changing threat environment and technological landscape," said a spokesperson for the department. The agency confirmed to FT that it had "revoked certain licenses for exports to Huawei" but did not reveal which US companies were involved.
The spokesperson added, "As part of this process, as we have done in the past, we sometimes revoke export licences."
Intel shares fell 2% in premarket trading in New York. Shares are nearing Covid lows.
Intel shares are down 40% this year, while the Philadelphia Semiconductor Index is up around 15%.
Didn't Biden give Intel $8.5 billion via the CHIPs Act?
Maybe Chips Act 2.0 is needed to save Intel.
