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Fitch: Intel Outlook Could Signal PC Market Hasn't Stabilized
March 12, 2015 / 6:28 PM / 3 years ago

Fitch: Intel Outlook Could Signal PC Market Hasn't Stabilized

(The following statement was released by the rating agency) CHICAGO, March 12 (Fitch) Intel's negative pre-announcement this morning suggests the end of support for Windows XP was a more significant factor than previously estimated in last year's perceived stabilizing personal computer (PC) demand, according to Fitch Ratings. Consequently, extended PC refresh cycles may result in a resumption of negative PC sales growth. Intel Thursday changed its first-quarter revenue outlook as a function of weaker than expected PC demand. Intel now expects $12.8 billion in first-quarter revenue versus its prior $13.7 billion projection. We believe expectations for sustained negative PC sales growth could pressure ratings or outlooks for technology companies for which stabilizing PC demand is a key base case assumption, including Advanced Micro Devices Inc. (B-/Stable), Dell Corp. (BB/Positive) and Hewlett-Packard Company (A-/Negative Watch). While Intel and Microsoft are negatively affected, Fitch believes both companies have significant financial flexibility at their respective current ratings to weather weaker PC demand as each continues to shift focus toward growth markets. Fitch now expects negative low-single-digit PC unit growth for 2015, driven by the resumption of an extended PC refresh cycle and consumer substitution of smartphones and tablets for PCs more than offsetting solid demand around the data center. These secular trends were clouded in 2014 by the end of support for Windows XP, resulting in only slightly lower PC unit growth for the year. Contact: Jason Pompeii Senior Director Technology +1 312 368-3210 Kellie Geressy-Nilsen Senior Director Fitch Wire +1 212 908-9123 Fitch Ratings 33 Whitehall Street New York, NY 10004 Media Relations: Alyssa Castelli, New York, Tel: +1 (212) 908 0540, Email: alyssa.castelli@fitchratings.com; Elizabeth Fogerty, New York, Tel: +1 (212) 908 0526, Email: elizabeth.fogerty@fitchratings.com. The above article originally appeared as a post on the Fitch Wire credit market commentary page. The original article can be accessed at www.fitchratings.com. All opinions expressed are those of Fitch Ratings. ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

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