Intel's credit rating downgraded by Fitch on demand challenges
Fitch downgraded, opens new tab Intel (INTC.O), opens new tab to BBB from BBB-plus, placing it just two notches shy of junk credit status.
The downgrade follows Fitch's assessment that Santa Clara, California-headquartered Intel faces heightened challenges maintaining demand for its products. Fitch cited growing competition from peers such as Dutch rival NXP Semiconductors (NXPI.O), opens new tab, Broadcom Inc (AVGO.O), opens new tab and Advanced Micro Devices (AMD.O), opens new tab.
"Credit metrics remain weak and will require both stronger end markets and successful product ramps, along with net debt reduction over the next 12-14 months" for Intel to recover its recent ratings, Fitch analysts wrote on Monday.
Fitch added that while Intel holds a better market position than other similarly rated peers, its financial structure is relatively weaker and it faces "higher execution risk."
Intel still enjoys a strong market position in the provision of PCs and traditional enterprise servers, Fitch noted, while warning the company faces heightened PC competition from Qualcomm (QCOM.O), opens new tab and AMD.
Intel will need to ramp up its PC shipments while also reducing its balance sheet debt to recover its previous credit ratings, Fitch said.
The ratings agency called Intel's liquidity profile "solid," which as of June 28 consisted of a $21.2 billion mix of cash, cash equivalents and short-term investments, as well as an untapped $7 billion credit revolver. It also had an undrawn $5 billion, 364-day revolver that will come due in January 2026, Fitch said.
Fellow ratings agency S&P Global similarly downgraded Intel's credit rating to BBB from BBB-plus in December, while Moody's Ratings downgraded its senior unsecured debt's rating in August last year.
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Telegraph
14 minutes ago
- Telegraph
Murdoch takes on Trump in press baron's last stand
When Rupert Murdoch stepped down as executive chairman of both News Corp and Fox just under two years ago, it was seen as a cautious first step into retirement for the nonagenarian media tycoon. Although still ultimately in charge of his empire, Murdoch has handed day-to-day responsibility over to his son Lachlan. Meanwhile, he has focused his attention on succession planning, including a bitter legal battle with his own children over the family trust. But any suggestion that Murdoch might slide into a quiet dotage now appears premature. Donald Trump's $10bn (£7.5bn) defamation lawsuit against Dow Jones, which publishes the Wall Street Journal (WSJ), is aimed squarely at Murdoch himself. The legal challenge is the latest salvo in Trump's increasingly aggressive assault on the media. It also sets up what will likely be a final battle for the world's best-known newspaper tycoon – and one that could define his legacy. As one of his former executives puts it: 'The American president has taken on Rupert Murdoch, an extraordinary media force for the last 50 years ... It's a box office story.' Trump's lawsuit relates to a WSJ story alleging that Trump sent the late paedophile Jeffrey Epstein a 'bawdy' birthday card complete with a drawing of a naked woman. Trump, who called the Journal's editor Emma Tucker from Air Force One in an effort to shut down the story, has branded it 'fake' and is seeking $10bn in damages. Trump has sniped at Murdoch, insisting the tycoon wants to settle. In a further provocation, lawyers for Trump last week filed a motion demanding an expedited deposition of Murdoch, citing the fact that the mogul is 94 and 'has suffered from multiple health issues throughout his life'. The scale of these alleged health issues was laid bare in a 2023 Vanity Fair article. It revealed Murdoch had been taken to hospital with a severe case of Covid-19, alongside several other incidents. Alex DeGroote, a media analyst, says the prospect of a trial in which Murdoch would have to take the stand is 'surely not a prospect Dow Jones and the WSJ want to entertain'. He adds that the tycoon may have been shaken by his recent legal clash with Dominion Voting Systems. In a case that signalled the end of Murdoch's cordial relations with Trump, Fox in 2023 agreed to pay $787m to settle a lawsuit with the voting machine company after the channel repeated the president's false claims that the 2020 election was rigged. That said, Murdoch would have a decent chance of success in any legal battle. Unlike in Britain, US libel laws are stacked in favour of the defendant. Trump will have to prove 'actual malice', meaning the WSJ knew the story was false and deliberately published it anyway. It is a high bar for Alejandro Brito, the Miami-based sole practitioner Trump has hired to represent him, to meet. Mark Stephens, a media lawyer at Howard Kennedy, says there are 'fundamental flaws' in Trump's lawsuit and it is likely to be thrown out, potentially as a Slapp [strategic lawsuit against public participation]. 'The case seems designed to try and chill down discussion of this topic, so you're trying to prevent public discussion of this issue and that has all the hallmarks of a Slapp,' he says. Yet it comes amid an increasingly aggressive assault on the media by Trump. The president has said the mainstream media is 'on notice' after securing settlements from both ABC and CBS in recent lawsuits. Alongside the financial and reputational implications, Trump can also cause problems outside the courtroom, as demonstrated by the move to ban the WSJ from a recent press trip to Scotland. The decision by CBS to capitulate in a $16m lawsuit filed by Trump has been widely interpreted as a way of securing approval for an $8bn takeover of its parent company Paramount. Stephen Colbert branded the settlement a 'big fat bribe' and was axed from the network shortly afterwards. By contrast, though, many believe Murdoch will not roll over and that the WSJ will stand by its reporting. '[Trump] assumes someone will settle and pay him an improbable amount of money, and I suspect that's not Murdoch,' says Stephens. The former executive adds: 'So many people think that Murdoch is the suppressor of a free press. Here you've got a very good example of the fourth estate standing up to the American president.' The source also points to the fact that two key figures – Robert Thomson, the Australian News Corp boss, and Emma Tucker, the British editor of the Journal – may be more willing to stand up to the US head of state than their American colleagues. Another senior figure who previously worked at News Corp agrees that Murdoch will 'close ranks' in defence. 'When you work there you're constantly under attack internally, except when something like this happens,' the executive says. 'They tend to fight hard amongst themselves in normal times, but when there's a crisis they say, 'We're backing you 100 per cent.'' Murdoch's support is not always longstanding, however. James Harding, the former Times editor who now runs The Observer, was quietly pushed out in late 2012 – reportedly after the tycoon baulked at his support for Obama in the presidential election. Could Tucker face a similar fate? It is far from the first time that Murdoch – a key inspiration for Logan Roy, the ruthless media patriarch in HBO hit Succession – has courted controversy or gone into battle against powerful foes. His reputation was cemented during the Wapping dispute, a year-long stand-off with print workers in 1986 in which the tycoon eventually broke the powerful unions. Perhaps most notorious, however, were revelations that journalists at the News of the World had eavesdropped on private messages. While Murdoch has always insisted that he did not know phone hacking was going on at his publication, he was forced to shutter the tabloid and his UK publishing empire has paid out more than £1bn in compensation and other related costs to victims. In the Murdoch empire, even family members are not off-limits in pursuit of victory in business. The patriarch last year clashed with three of his children – Prudence, Elisabeth and James – over his attempt to change the family trust to hand over complete control to Lachlan. Following a high-profile legal battle that drew comparisons to Succession, Murdoch was ultimately defeated, setting the scene for an almighty tussle over his legacy. But his battle with Trump highlights the conflicting positions Murdoch is required to hold as the owner of news outlets that are, variously, sycophantic to Trump and doggedly determined to hold him to account. What's more, it raises fundamental questions about whether it is his commercial interests or passion for journalism that will ultimately win out. Murdoch once claimed that the reputation of his media outlets was 'more important than the last hundred million dollars'. Yet the tycoon has previously been accused of cosying up to China's communist regime and indulging censors in Beijing in an effort to protect his business interests. Ahead of his takeover of Dow Jones in 2007, a group of China-based WSJ writers accused the mogul of 'sacrificing journalistic integrity to satisfy personal and political aims'. In 1998, he ordered publisher HarperCollins to kill a book by Chris Patten, Hong Kong's last British governor, because of its critical stance towards Beijing. In his latest legal battle, it is not Chinese authorities that Murdoch must be sensitive to, but his own Trump-supporting audiences. In a sign that Murdoch is looking to expand his influence in new areas, News Corp this week unveiled plans to open a new outpost of the New York Post based in Los Angeles. Robert Thomson, the News Corp boss, vowed the new title, dubbed The California Post, would be an 'antidote to the jaundiced, jaded journalism that has sadly proliferated'. Playing both sides While Dow Jones has said it will 'vigorously defend' against any lawsuit, both Fox and the New York Post have remained silent on the issue, suggesting Murdoch may be trying to play both sides. DeGroote says: 'Would it be in his commercial interest to wreck the relationship between his own viewers, his own readers and his titles by being seen to pursue an anti-Trump agenda?' The WSJ is by no means a struggling newspaper business. It had more than 4.3 million subscribers at the end of March, while Dow Jones posted quarterly revenues of $31m. Fox, which pulled in $1.6bn from its cable network in the same three month period, remains the real money-spinner, however. While British broadcasters are struggling to retain viewers in the streaming age, Fox News continues to dominate the US ratings with an average primetime audience of 2.6 million in the second quarter. At the same time, it has been making advances in its digital offering. Fox recently struck a licensing deal with Ruthless, a popular podcast hosted by Republican influencers, while it is set to launch a new streaming service this autumn. Murdoch's supporters argue that he will not be swayed by commercial interests. 'The value of those companies has only grown and I think he takes a really long view – certainly long for someone who's 94 years old,' says the former News Corp executive. Others believe Trump's decision to take on the mogul will backfire. Stephens says: 'By taking this suit he's potentially putting the entire Murdoch press offside. Is that sensible for a Republican president? Essentially the megaphone to Trump's base is held by Rupert Murdoch.' He adds that this is an example of the so-called Streisand effect, where efforts to cover something up only result in greater public awareness. It is not lost on many, however, that Murdoch may prove to be the last true press baron. The role of the newspaper proprietor has traditionally been a powerful one, steering a title's editorial direction and wielding influence over presidents and prime ministers. William Randolph Hearst, the inspiration for the titular character in Orson Welles' classic film Citizen Kane, is often considered to have helped push the US into the Spanish-American war at the end of the 19th century thanks to sensationalist reporting in his tabloids. Lord Beaverbrook, the Canadian-British newspaper publisher whose empire included the Daily Express, has taken credit for the downfall of David Lloyd George's post-war government in 1922. Murdoch must now decide whether he is up for a blockbuster fight with the president that would almost certainly define his legacy as a newspaper man. His stance will also be crucial for Tucker, whom he elevated from editorship of The Sunday Times to lead the WSJ newsroom in 2023. The Briton's willingness to make difficult decisions appears to have impressed Murdoch and she is generally well-regarded at the US newspaper, despite a backlash last year, when journalists plastered her office in Post-it notes in protest against job cuts. That was a minor skirmish from which she emerged unscathed. The stakes for Tucker now, as she comes under Trump's legal assault, could scarcely be higher. For Murdoch, the reputation he has cast for himself over decades as a bulwark of a free press is on the line. Murdoch's status is unique. Jeff Bezos, owner of The Washington Post, is undoubtedly a mogul and a far wealthier one, but with tech rather than media values. His tendency to intervene in his publication in ways that have pleased Trump has already come under scrutiny. 'This is the last of the big tycoons in newspapers,' says Murdoch's former lieutenant. 'There's just a lot less money to be made in newspapers than there was and so it won't produce these very powerful media tycoons in a world where the media landscape is pretty fragmented and atomised.' 'Any number of people might have more money than Murdoch and they might even desire to have that level of influence, but they may not know how to do it. It's a skill to remain relevant and ultimately what he's done is stay relevant.' As a result, the newspaper proprietor in its traditional sense – as a wielder of political power and influence – seems an endangered species. So as Murdoch faces down the president of the United States, it may be the last stand for the last press baron.
Reuters
14 minutes ago
- Reuters
Diageo delivers on annual forecasts, shares jump
Aug 5 (Reuters) - Diageo (DGE.L), opens new tab forecast flat full-year sales on Tuesday, despite a $200 million impact from tariffs, helping reassure investors after a period of demand and share price turbulence, a sudden CEO exit and trade war worries. Shares in the world's top spirits maker rose over 6% in early trade, after Diageo also reported full-year profit ahead of expectations for its 2025 financial year, which ended in June. The maker of Johnnie Walker whisky and Smirnoff vodka has been battling with prolonged sales weakness, worries about its management and ever-changing U.S. tariff threats. Following the surprise exit of former CEO Debra Crew last month, it is now looking for a new CEO, opens new taband finance chief, opens new tabto turn around its performance, and guide it through a plan announced in May to cut costs and make substantial asset sales by 2028. Interim CEO Nik Jhangiani told journalists on a call that the board is working quickly and he expected a decision on who will take the helm permanently by the end of October. "We have delivered what we said we would deliver," he said of the company's full-year performance, adding however there was a lot more to do to get the company back to full potential. All spirits makers have struggled amid prolonged, industry-wide sales declines as high interest rates and inflation have hit consumers' wallets. Diageo's shares have been hammered in recent years, losing 30% of their value this year alone and an even steeper decline since highs seen in 2022, when spirits sales were booming. Rising competition from alternatives like cannabis drinks, shifts towards drinking less, the emergence of weight-loss drugs and threats of steep tariffs in the U.S., Diageo's largest market, have also made investors nervous. Analysts said Diageo's performance and outlook for its current financial year were encouraging in a difficult environment, and in line with forecasts. "These results might not be awesome in our opinion, but they fulfil the first criteria of consumer staples companies in that they were as expected," James Edwardes Jones, analyst at RBC Capital Markets, said in a note. Diageo forecast organic sales would fall slightly in the first half of its 2026 financial year - which runs to end-June 2026 - with growth more weighted towards the second half. It increased the estimated impact of tariffs for the year from $150 million previously, and also increased its cost savings target to $625 million, about $125 million more than its previous aim. Diageo faces tariffs of 10% and 15% on the United Kingdom and European Union under trade deals brokered with Washington, though spirits companies still hope to win an exemption in talks with the EU. Organic sales increased 1.7% in fiscal 2025, beating analysts' average forecast of 1.4% in a company poll.
Reuters
14 minutes ago
- Reuters
Dollar edges up vs euro and yen, but still close to Friday's lows
Aug 5 (Reuters) - The dollar edged up against the euro and the yen, but remained within striking distance of Friday's lows, after weak U.S. jobs data boosted bets on Federal Reserve rate cuts and triggered a sharp selloff in the greenback. Goldman Sachs expects the Federal Reserve to deliver three consecutive 25 basis-point rate cuts starting in September, with a 50 basis-point move possible if the next jobs report shows a further rise in unemployment. It also sees the European Central Bank as having concluded its easing cycle. Economists raised their growth forecasts for the euro area and Japan following relatively benign trade agreements, while arguing that Friday's U.S. jobs report confirmed the economy is hovering near stall speed. Meanwhile the firing of the head of the Bureau of Labor Statistics (BLS) on Friday, and the resignation of Fed Governor Adriana Kugler, could harden the views of the FOMC to ensure its independence is protected, analysts said, recalling that the new appointee will be just one vote on the Fed's Federal Open Market Committee (FOMC). The euro was last down 0.12% at $1.15592, after hitting on Friday $1.15855. The dollar index , which measures the U.S. currency against six counterparts, was at 98.816, after touching a one-week low earlier in the session at 98.609. "Traders likely inferred that the (U.S. jobs) report gave President Donald Trump even more justification to 'fire' Jay Powell," said Thierry Wizman, global forex and rates strategist at Macquarie Group. "Alternatively, it gave Trump even more support for giving the Chairmanship to someone that would be more 'structurally' dovish," he added, arguing that Friday's employment report shifted the outlook for where the Fed Funds rate target will be one year from now. Money markets are now pricing in a 92% chance of the Fed cutting rates in its next meeting in September, compared with 63% a week earlier. They also indicate 130 bps of rate cuts by October 2026, 30 bps more than the levels seen on Friday before U.S. jobs data. The Japanese yen was down 0.14% at 147.3 per dollar after minutes of its June policy meeting showed a few Bank of Japan board members said the central bank would consider resuming interest rate increases if trade frictions de-escalate. The focus remains on tariff uncertainties, after the latest duties imposed on imports from scores of countries last week by Trump stoked worries about the health of the global economy. The Swiss franc extended losses for a second day, weakening 0.1% to 0.8089 per dollar after dropping 0.5% in the previous session. However it was still above the levels seen before Friday's economic figures, at around 0.8128. Switzerland is looking to make a "more attractive offer" in trade talks with Washington, to avert a 39% U.S. import tariff on Swiss goods that threatens its export-driven economy. In other currencies, the Australian dollar eased 0.05% to $0.6464, while the New Zealand dollar slipped 0.1% to $0.5898.
