Sunday, November 18, 2012

Intel: Will Q1 Be A Blow-Out? Or Are Expectations Too High?

The Street has begun tweaking estimates for Intel (INTC) ahead of Q1 results coming up next Tuesday.

  • Caris & Co. analyst Craig Ellis this morning moved up his Q1 EPS forecast to 41 cents, from 38 cents, and above the Street at 37 cents. For 2010, he goes to $1.90, from $1.82; for 2011, he now sees $2.02, up from $1.96.� Ellis says the higher estimates reflects another quarter of “better than feared” PC and server demand. Ellis maintains his Buy rating on the shares, lifting his target price to $27.
  • FBR Capital analyst Craig Berger says his own checks find that Q1 PC end demand has been “robust,” and that revenue for the quarter is tracking to the upper half of guidance. On the other hand, he also notes that some contract PC makers are pushing out component orders and/or device builds, due to “Chinese labor shortages” plus “some capacitor-related component bottlenecks.” Berger writes that he respects Intel’s “stellar execution and strong product road map,” but that he would be more interested in the stock in the $19-$20 range. Berger sees Q1 EPS at 39 cents.

Intel has forecast revenue for Q1 of $9.7 billion, plus or minus $400 million, with gross margin of 61%, plus or minus two points.

Worth remembering that the Q1 results were well ahead of the Street, at 40 cents a share share, a dime ahead of expectations, as the company surprised at both the revenue and gross margin lines.

INTC today is off 27 cents, or 1.2%, to $22.32.

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