S&P Global downgraded Intel’s credit rating due to slow recovery and management changes

(Reuters) – Standard & Poor’s ratings agency on Tuesday downgraded chipmaker Intel Corp’s credit rating to BBB from BBB+, citing a slow business recovery and uncertainty after management changes.

Standard & Poor’s Global said the chipmaking 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 rating agency’s expectations.

The departure of CEO Pat Gelsinger, who played a critical role in 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 continue to assume some level of change under the new CEO, which may increase uncertainty about the timing of the business turnaround,” the credit rating agency said.

Gelsinger’s departure came long before the completion of a four-year road map to regain the company’s leadership in manufacturing the fastest and smallest computer chips, a crown it lost to Taiwan Semiconductor Manufacturing Corp.

However, S&P Global kept its outlook for the company “stable” to reflect its view that Intel will see growth after a modest rebound next year.

(Reporting by Leroy Liu in Bengaluru; Editing by Krishna Chandra Eluri)