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March 28, 2020

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Intel mum on layoffs as shares jump 6 percent

Chipmaker says it expects continued growth this year

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PORTLAND — Intel shares climbed more than 6 percent in after-hours trading Thursday after the chipmaker reported strong quarterly sales growth and said it expects continued growth in 2020.

“One year into our long-term financial plan, we have outperformed our revenue and (profitability) expectations,” CEO Bob Swan said in a written statement. “Looking ahead, we are investing to win the technology inflections of the future, play a bigger role in the success of our customers and increase shareholder returns.”

The Oregonian/OregonLive and tech news sites reported over the past week that Intel plans broad — but not deep — layoffs across its business groups. Intel’s global workforce declined by just under 1 percent during the fourth quarter as Intel reduced headcount by about 1,100 jobs.

Thursday’s announcement did not explain the reduction and gave no indication it expects future layoffs. The company had previously declined to comment on employment; it planned a conference call with investment analysts later Thursday.

Intel’s sales grew 8.3 percent in the last three months of 2019 and 1.6 percent for the entire year. The company had initially forecast a down year in 2019 but its outlook improved steadily as the year went on.

Sales totaled $72.0 billion for all of 2019, up 1.6 percent from the prior year. Intel said it expects revenue of $73.5 billion in 2020 and issued an unusual long-term forecast, indicating it expects annual sales around $85 million by the end of 2023.

Fourth-quarter sales totaled $20.2 billion — including a nearly 18 percent jump in revenue in Intel’s highly profitable data center group.

Annual earnings were $21.0 billion, flat compared to 2019.

Earlier this week, industry research site Gartner said Intel has reclaimed its position as the world’s largest chipmaker. It’s a position Intel held for years but surrendered in 2017 amid slower sales growth and a sharp rise in demand for memory chips, a Samsung specialty.

That situation has reversed. Memory chip sales fell by an enormous 31.5 percent last year, according to Gartner. That stung Intel, which now has its own memory business, but the effect was much more significant at Samsung, which depends on memory chips for more than 80 percent of its revenue.

Intel’s shares climbed $4.10 to $67.32 Thursday afternoon in after-hours trading after Intel’s quarterly announcement. That is its highest point since the dot-com era.

Intel is Oregon’s largest corporate employer.

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