American tech icon Intel (INTC) slashing its dividend on Wednesday isn't a total shock to one money manager.

"Intel is an interesting story because they have very specific issues going on with their business. They've been losing market share to their competitors and I think cutting their dividend is an indication" of that, DoubleLine Capital investment grade corporate credit manager Monica Erickson told Yahoo Finance Live (video above).

Intel said it would cut its dividend to 12.5 cents from 36.5 cents, about a 65% reduction. Shares only fell slightly — around 1% in midday trading — on the news, as investors had been bracing for a cut.

The cut comes amid several challenging quarters for the company highlighted by further market-share loss to rivals such as Advanced Micro Devices (AMD) and higher costs to build out new chip-making facilities.

A post-COVID slowdown in the PC market has also weighed on sales.

The company's fourth-quarter sales plunged 32% from the prior year. Sales in the key client computing and data center segments dropped 36% and 33%, respectively.

The company paid out $6 billion in dividends in 2022. But with cash flow dropping by about $14 billion year over year and results under pressure in the fourth quarter, some on Wall Street questioned whether it was time for Intel to cut the dividend.

Intel CEO Pat Gelsinger told Yahoo Finance Live several weeks ago the company was committed to a "healthy and competitive dividend." But Gelsinger declined to support the dividend payout at its now former level.

"Intel is one of those companies where — and we've been looking at it —I think that their fundamentals have had a difficult time kind of turning that around," DoubleLine's Erickson said. "They are focused on their balance sheet and making sure that it's solid enough that they can come to market when they need to raise capital."

Brian Sozzi is Yahoo Finance's Executive Editor. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

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