Coronavirus Impact: Intel Halts Stock Buybacks, Donates Safety Equipment
Intel is donating 1 million masks, gloves and other protective gear to health-care workers and suspending stock buybacks in response to the coronavirus pandemic, which the company warns will possibly lead to a global recession that materially impacts its business.
Intel has halted a stock repurchasing program in response to the coronavirus pandemic, which the company warned could lead to a global recession that materially impacts its business.
The Santa Clara, Calif.-based company announced the suspension of its stock buyback program Tuesday, saying that it has repurchased a total of $7.6 billion in shares in the fourth quarter of 2019 and first quarter of 2020 out of a total $20 billion in shares it planned to buy over 15 to 18 months.
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"Intel’s management believes the suspension, while conservative, is prudent given uncertainty regarding the length and severity of the pandemic," the company said in an 8-K filing with the U.S. Securities and Exchange Commission, adding that it will not impact dividend payments to stockholders.
Intel's stock price was up roughly 7.42 percent to $53.58 before market open Tuesday.
The decision to suspend stock buybacks, which Intel said it can reinstate, was announced after the semiconductor giant said Monday night that it will donate 1 million masks, gloves and other protective gear to health-care workers in response to the pandemic.
Intel is famous for its "bunny suits" that support the company's high cleanliness standards, which are key to the company's chip manufacturing imperatives.
"We will donate masks, gloves, face shields and other gear that we have sourced from our factory stock and emergency supplies, and we’ll continue to look for additional sources of personal protective equipment that we can source and donate as quickly as possible to meet our commitment of more than a million items," Todd Brady, director of global public affairs for Intel, said in a statement.
In a separate SEC filing Monday night, Intel warned that the spread of the novel COVID-19 coronavirus and international efforts to contain it have "significantly increased economic and demand uncertainty," which the company said will likely cause an economic slowdown and even a global recession that would hamper its business prospects.
"The degree to which COVID-19 impacts our results will depend on future developments, which are highly uncertain and cannot be predicted, including, but not limited to, the duration and spread of the outbreak, its severity, the actions to contain the virus or treat its impact, and how quickly and to what extent normal economic and operating conditions can resume," Intel said in a statement.
Intel CEO Bob Swan last Thursday said the company is meeting delivery deadlines on products more than 90 percent of the time as it puts safety and health measures in place to protect its employees, contractors and partners. The company is also donating $1 million to the International Red Cross' coronavirus relief efforts while it explores opportunities to support local communities.
"Ensuring the safety and well-being of our employees, service partners and communities continues to be our number one commitment," Swan said in a letter to customers and partners. "At the same time, we recognize that the role our industry plays in the world is more essential now than it has ever been."