Intel Earnings Preview (20.84 +0.15) -Update-
Intel (INTC) is set to report Q1 results after the close tonight with a conference call following at 5:30 ET. Current First Call consensus estimates are for EPS of $0.25 on revs of $9.63 bln... Guidance: In its Q4 earnings report, the company issued in-line Q1 revenue guidance of $9.4-$10.0 bln. On 3/3, INTC lowered its Q1 gross margin forecast to 54%, compared to previous forecast of 56%, due to lower than expected prices for NAND memory chips. On 3/5, at its Analyst Day, the company said NAND price erosion is at 54% in the qtr, while they were expecting around 27%. However, INTC also said the PC industry still looks solid, forecasting low double-digit growth rates... Analyst Expectations: Analysts are generally expecting the company to report in-line to a slight miss. JMP believes any macro-related PC server industry weakness may be offset by a richer product mix with quad-core server and desktop chips. However, UBS lowered their Q1 sales estimate by 2% based on recent checks, industry data, and macro weakness... Recent Earnings History: 4Q07 (1/15): INTC missed EPS consensus by $0.02 and missed on revs, while guiding Q1 revs in-line. The stock sold off sharply the next day, closing lower by 12%; 3Q07 (10/16): INTC beat EPS consensus by a penny and beat on revs, while guiding Q4 revs above consensus. The stock closed higher by ~5% the following day; 2Q07 (7/17): INTC reports EPS in-line and beats on revs while issuing in-line Q3 rev guidance. The stock closed lower by ~5% the next day; 1Q07 (4/17): INTC reports Q1 EPS in-line and missed on revs while guiding Q2 revs below consensus. The stock closed marginally higher the next day... Areas of Focus: 1) Revenue, Margin, Capex Guidance: Historically, INTC issues revenue, GM, and capex guidance for the upcoming qtr. Going back to 1Q07, INTC reported revs of $8.85 bln, and guided 2Q07 revs to $8.2-$8.8 bln, a 3-4% sequential decline at the mid-point. Market participants will be looking for similar guidance at least. Current street expectations for Q2 GM stands at 54.9%, and at 56% for FY08. Capex street expectations for FY08 are $5.2 bln. INTC's guidance will be analyzed by the broader markets as an overall barometer of the overall health in the IT sector; 2) NAND Pricing Environment: On 3/3, INTC lowered its Q1 gross margin guidance specifically due to weak NAND pricing. Of significant interest will be whether the company has seen further deterioration, a stabilization, or any improvement; 3) PC Demand: INTC's expectation for PC growth is at 11%. On 3/3, INTC stated that overall PC demand remained strong. A reaffirming of this outlook would be deemed a positive for INTC; 4) Competitive Landscape: Intel's primary competitor, Advanced Micro (AMD), continues its struggles, confirmed by its negative pre-announcement on 4/7. This may also suggest further share gains from INTC at AMD's expense. However, AMD is in the process of re-launching Barcelona, which could have a negative impact on INTC's Q2 rev outlook... Secondary Plays: AMD, TXN, BRCM, QCOM, DELL... Technical Levels of Interest: Click here for INTC chart. (Length of the horizontal lines corresponds with the strength of the level.) (PVIEW)
Intel Earnings Preview from Briefing.com
Tuesday, April 15, 2008
Posted by DayTrader RockStar at 3:40 PM
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