After reporting a loss in its latest quarterly earnings, despite surpassing estimates, Intel saw its stock plunge by almost 9% on Friday, wiping out most of this year's gains. The slump came as a reaction to concerns about the slow pace of the chipmaker's turnaround, led by its new CEO Lip-Bu Tan. Forecasters expressed worries that Intel's strategies have been "more incremental than sweeping" with a dearth of competitive products till the coming year.
Despite recognizing an improved level of discipline in the company under Tan's leadership, analysts from Jefferies felt that some problems might not be fixable. They held a "hold" rating for the stock, choosing to remain passive for now. Similarly, analysts from Citi and HSBC also kept their ratings neutral due to uncertainties around Intel's turnaround gameplan. Notably, HSBC found Intel's results and outlook to be "uninspiring."
The CEO remains hopeful, though. "It’s going to take time, but we see clear opportunities to enhance our competitive position, improve our profitability and create long-term shareholder value," Tan reassured the investors.
In conjunction with its turnaround strategy and towards reducing costs, Intel has also announced plans to downsize its workforce by 15%. The company will postpone ongoing projects in Germany and Poland and slow down the construction of its new chipmaking premises in Ohio.