JPMorgan Takes Hint from H-P (HPQ), Says PC Challenges Will Hit Intel (INTC), AMD (AMD)

February 22, 2013 7:24 AM EST
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Hewlett-Packard (NYSE: HPQ) is indicated for a higher open Friday following strong first-quarter 2013 results, though not all might be as peachy as top-line numbers suggest. For H-P, or its rivals.

During H-P's conference call, CFO Catherine Lesjak stated: Frankly the business deterioration we are seeing in personal systems particularly in EMEA, and with notebooks is worse than we expected. For Q2, we expect the rate of year-over-year revenue declines between personal systems to increase from Q1 especially given that in Q2 of 2012, we were benefiting from the rebound after the hard disk drive shortage the previous quarter.

JPMorgan analyst Chris Danely comments that this is the second negative PC data point out during the week, with the firm noting weakness at H-P rival Lenovo during the Chinese New Year earlier this week.

Danely thinks that the weakness will weigh on Intel (Nasdaq: INTC) and Advanced Micro Devices (NYSE: AMD), which he rates both at Neutral. Specifically, Intel might be getting ahead of itself on growth prospects, Danely noted.

Amid the comments, H-P said it sees second-quarter 2013 EPS of 80 cents to 82 cents and FY13 EPS of $3.40 to $3.60, both coming in ahead of consensus views calling for Q213 EPS of $0.77 and FY13 EPS of $3.32.

All three are indicated higher early.

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