Q2 Preview: Intel (INTC) Investors Eye AMD Outlook, Lagging PC Sales

July 17, 2012 1:43 PM EDT
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Intel (Nasdaq: INTC) is trading stronger heading into its second-quarter earnings report, which is expected out after the market closes Tuesday.

The company will be holding a call at 5:00pm EDT today. Click here to access the event.

Currently, the Street is looking for a 12 percent drop in profit to 52 cents per share on sales of $13.56 billion. Estimize consensus numbers see sales of $13.58 billion and EPS at 54 cents, slightly above analyst views.

Through the quarter, Intel shares fell 4.6 percent to $26.65 at the end of June. The stock is down 5 percent since the end of June, but up 6 percent from the start of 2012.

Notably, recent data from IDC and Gartner have the global PC market contracting by about 0.1 percent in the second quarter, not a positive indication for Intel or its peers.

Analyst Views/Technicals
Data from Bloomberg has 27 analysts at Buy on Intel, 25 with a Neutral, and four at Sell.

The analyst price target average is $30, ranging from $22 to $34. Numbers compare to Intel's 52-week trading range, which moved from $19.16 to $29.27.

Shares are below the 50-, 100-, and 200-day moving averages as well.

Analyst Comments
  • Williams Financial sees EPS of 52 cents with sales of $13.55 billion. The firm recently issued an update, trimming its fiscal 2012 outlook on Intel following comments from peer Advanced Micro Devices (NYSE: AMD) last week, cutting its second-quarter outlook (for more on that announcement, click here). Williams notes how Intel is basically the only company in the segment which hasn't trimmed views for 2012. The firm thinks Intel is likely to make a revision during the second-quarter call.

  • JPMorgan sees Intel reporting sales of $13.5 billion, and EPS of $0.59. Sales would be slightly below the midpoint of Intel's outlook. In addition, the firm thinks Intel's guidance for Q3 will show a 4 percent sequential increase to $14 billion, which is below the normal average of a 9 percent increase.

    JPMorgan notes that AMD and Intel are about 85 percent exposed to the PC end market.

  • Wells Fargo is looking for EPS of $0.51 and revs of $13.6 billion. Unlike the above two firms, Wells is more positive on Intel, seeing the firm grabbing market share from AMD, easy comps, Ivy Bridge demand in Ultrabooks, and Romley server chip sales.

    Looking ahead, Wells sees Q3 sales guidance up 9 percent to $14.8 billion, in-line with seasonal patterns.

    On the call, Wells will be listening for: "[an update on] recently announced alliance with ASML over development of next generation EUV lithography technology, new smartphone wins for Medfield and new Atom products for Micro Servers."
Stay tuned to StreetInsider.com's EPS Insider section to see our analysis of the highly-anticipated quarterly results within seconds of their release. You can also check out Intel's past performance at Streetinsider's Intel's Income Statement.

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