Deutsche Bank Cuts Q3 Estimates for Semiconductor Plays on Weaker Demand (INTC, BRCM)

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Analysts at Deutsche Bank on Tuesday offered some tepid commentary for processor maker Intel Corporation ( INTC ) and wireless chipmaker Broadcom Corporation ( BRCM ).

The firm said it expects INTC to report second quarter profits of 52 cents per share on $13.617 billion in revenue. For the third quarter, Deutsche Bank cut its profit estimate from 67 to 65 cents and its revenue outlook from $14.951 billion to $14.71 billion, citing ongoing macroeconomic weakness.

The analyst forecast BRCM to post earnings of 68 cents per share for the second quarter, on $1.953 billion in revenue. For the third quarter, Deutsche Bank lowered its estimate from 80 cents to 78 cents and revenue outlook from $2.121 billion to $2.086 billion.

The firm commented, "While we believe semi co's will report 2Q12 results that are generally in-line with DB ests, we are trimming our 3Q12 ests for the majority of co's under coverage to reflect the weaker macro environment. The muted slope of this recovery will demand investor patience, but we maintain our Overweight stance on the semi sector as we see q/q growth continuing in 2H12 and view both sector-wide inventory and valuation as attractive."

Intel shares fell 32 cents, or -1.2%, in premarket trading Tuesday, while Broadcom shares posted small gains.

The Bottom Line
Shares of Intel ( INTC ) have a 3.44% dividend yield, based on last night's closing stock price of $26.17. The stock has technical support in the $24 price area. If the shares can firm up, we see overhead resistance around the $28-$29 price levels. Shares of Broadcom ( BRCM ) have a 1.26% dividend yield, based on last night's closing stock price of $31.64. The stock has technical support in the $28-$30 price area. If the shares can firm up, we see overhead resistance around the $34-$36 price levels.

Intel Corporation ( INTC ) and Broadcom Corporation ( BRCM ) are both currently rated "Neutral" by Dividend.com.

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

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