Even with solid earnings out of IBM (
) and VMware (
) this week, investors are selling shares of Intel (Nasdaq: INTC)
Wednesday afternoon ahead of second-quarter results. The quarterly
report will be out after the market close.
Intel shares last traded at $23.00, down 0.2 percent from Tuesday's
Intel should report earnings of 51 cents per share on revenue of
$12.82 billion. Hitting this level of earnings would mark a 13.6
percent drop from last quarter.
Shares gained 10.7 percent in the quarter and are up 3.8 percent
since. Shares have traded in a range of $17.60 to $23.96 over the
Intel shares trade at 9.6x next year's earnings, compared with 8.6x
for Advanced Micro Devices (
), and about 13x for IBM.
Data from Streetinsider's
has 27 analysts with a Buy, 18 are Neutral, and three suggest to
Sell the stock. The analyst price target average is $25.50, with a
low of $19 and high of $31.
- Deutsche Bank is looking for earnings of 51 cents and revs of
$12.86 billion in the quarter. Deutsche says "strength in
Enterprise (Servers & Clients) and potential mix-driven ASP
improvement offset offset lower-than expected Consumer PC
Key items in the quarter will be: 1) Product mix, 2) PC unit
growth, 3) share loss/gains vs. AMD, 4) inventory levels, 5)
progress in non-core markets.
- JPMorgan sees a pro-forma EPS of 49 cents in the quarter with
revs of $12.8 billion. "Our checks across the semiconductor food
chain indicate demand from the PC food chain is expected to
remain muted through 3Q11. Both Microchip and Fairchild recently
stated PC demand is tracking below seasonal in 3Q11, and our
checks indicate Intel pushed out orders to its substrate
suppliers...We still expect consensus estimates for Intel to
increase following 2Q11 earnings due to strong pricing and easy
comps as consensus expects 5% QoQ revenue growth in 3Q11, below
normal seasonality of 9% QoQ growth."
- Wedbush sees earnings of 47 cents per share on revs of
$12.101 billion. "While we believe the uncertain macro outlook
will likely weigh on the stock in the near-term, as we look
beyond these industry wide challenges, we think Intel will trade
in-line with our universe as the computing giant (1) integrates
new businesses, (2) creates a new category in the traditional
notebook/tablet market with 'Ultrabooks', and (3) makes its bid
to be a player in the rapidly growing smartphone and tablet
markets with its x86 architecture against the incumbent ARM-based
Keys to the quarter from Wedbush: "(1) corporate IT spending for
PCs, (2) data center buildout, and (3) ramp of Sandy Bridge, as
well as a full quarter of revenue from McAfee and Infineon
Wireless Division acquisitions."
- Wells Fargo is looking for earnings of 49 cents and revs of
$12.8 billion. "We believe that Intel benefited from the ramp of
new processor families, Sandy Bridge in the desktop and notebook
space and Westmere-EX in the 4-way server space, through the
whole of the June quarter. On the other hand, AMD's new Llano
products for notebooks and desktops were only launched towards
the end of the June quarter...Notebook unit shipments reported by
the larger Taiwanese notebook ODMs were up 6% month over month in
June and up 6% sequentially for the quarter as a whole."
- Citadel expects earnings of 49 cents per share on revs of
$12.77 billion. Revs may come in above the consensus "driven by
strength in servers and slightly better than seasonal motherboard
and notebook ODM shipments (+8% qoq in aggregate, vs. typical
seasonality of +3%). We note that this compares favorably with
implied organic growth of roughly flat (on a 13-week adjusted
basis) that is implicit in Intel's outlook and the Street
consensus. Also bolstering our bullish view on top-line growth
are recent results from our proprietary retail PC survey which
suggest that Intel's guidance for a slight sequential decline in
processor ASPs will likely prove conservative, due in part to a
better mix of premium priced Sandy Bridge systems and processors,
relative to initial expectations. Finally, our retail PC survey
data also suggests that Intel took as much as 1.5ppt of share
from AMD in 2Q."
Stay tuned to StreetInsider.com's
section to see our analysis of the highly-anticipated quarterly
results within seconds of the release.