Intel inks $8bn debt deal, preps for Altera buy
Chipzilla bets farm on data centre growth after 6% profit fall
Intel has bumped up its debt levels by $8bn (£5.2bn) to $20bn (£16bn), ahead of its $16.7bn (£10.4bn) gobble of data centre chip outfit Altera.
The Chipzilla admitted to taking on huge debt levels during its third-quarter results conference call.
During the three-month period it generated revenues of $14.5bn (£9.4bn) and a net income of $3.1bn (£2bn), six per cent less profit than the same period last year.
"Our net cash balance, total cash less debt, and inclusive of our other longer term investments, is approximately $5.1bn. Over the next two quarters, we expect to complete the acquisition of Altera," said chief finance officer Stacy Smith.
In June, Intel signed the $16.7bn (£11bn) deal with Altera, in an attempt to move into the much-hyped internet of things hype market, and boost the data centre business unit. The hope is that such a move will offset the ever-shrinking PC market.
But while the data centre group at Intel saw revenues rise to $4.1bn, up 12 per cent on the year and eight on the quarter – the overall forecast for that market has been downgraded.
"We now expect the data center business to grow in the low double digits versus the prior forecast of approximately 15 per cent," said Smith. ®