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Oct 23, 2020

Intel dodges Wall Street critics on tough earnings call

Intel Corp. signage is displayed at the entrance to the company\'s headquarters in Santa Clara, California. Photographer: David Paul Morris/Bloomberg

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Intel Corp.’s biggest critics on Wall Street didn’t get a chance to question executives on its recent earnings conference call, a sign of mounting pressure on the chipmaker and its leadership.Intel stock plunged as much as 12 per cent Friday following a report that detailed a drop in profitable data center chip demand and falling overall profitability. That follows a 16 per cent share slump after its second-quarter results three months ago.

The world’s largest chipmaker is at the center of a debate about its future, one that its detractors are winning. They argue that multiyear delays in introducing new manufacturing technology has cost Intel its main competitive advantage and rivals are going to thrive at its expense. Intel counters that the company is posting record sales and expanding into new areas.

Sanford C. Bernstein’s Stacy Rasgon was among those who weren’t called on to ask questions during Thursday’s call. Of the eight analysts that were, five recommend buying the stock. In general, less than a third of recommendations on Intel’s stock tracked by Bloomberg analytics are buy.Rasgon’s absence was notable because he’s one of the most outspoken critics of the company who often peppers management with tough questions. Around the end of Thursday’s conference call, Rasgon tweeted “Cowards...” and posted a video clip from a Monty Python movie with knights fleeing a battle. It’s unclear if he was referring to Intel.

During July’s earnings call, Rasgon clashed with Chief Executive Officer Bob Swan, who snapped back at the analyst and asked for a chance to answer amid a series of interjections.“The questions on this week’s third-quarter earnings call were very representative of questions we heard from sell-side analysts,” the company said in an email. “Each quarter we take a full range questions both on the call and afterwards, and the questioners vary from quarter to quarter.”

Swan also appeared on Bloomberg Television on Friday to address questions about Intel’s chip manufacturing plans.

Rasgon, who declined to comment on why he didn’t get a chance to speak on the call, produced another fiery research note on Friday.“While we thought last quarter’s call was bad, last night’s was potentially even worse as fundamentals are now deteriorating at an alarming pace,” he wrote. “Frankly, while CEO Bob Swan suggested 2020 has been the most challenging year in his career, we have to believe that 2021 is going to be worse.”