Q3 Preview: Intel (INTC) Expected to Meet Lower Expectations
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Price: $34.50 +0.64%
Overall Analyst Rating:
NEUTRAL (= Flat)
Dividend Yield: 1.4%
EPS Growth %: +475.0%
Overall Analyst Rating:
NEUTRAL (= Flat)
Dividend Yield: 1.4%
EPS Growth %: +475.0%
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Intel (Nasdaq: INTC) traded higher ahead of the company's third quarter earnings report, expected out after the market closes Tuesday, October 12, 2010. Shares are up 0.15% to $19.55 afterhours.
Intel is expected to report an EPS of $0.50 on revs of $11 billion. Last quarter, the company reported an EPS of $0.51 on $10.8 billion in revs. CEO Paul Otellini said it was the company's best quarter in their 42-year history. One year ago, for Q309, the company posted an EPS of $0.35 and revs of $10.2 billion.
Shares of Intel have gained modestly though the quarter ending 0.5% to $19.20 on September 30, 2010. Shares are currently trading 3.6% lower YTD, and up 2.4% since the end of the quarter.
Data from Bloomberg has 31 analysts with a Buy rating, 19 with a Hold, and two suggesting to Sell. The analyst price target average is $23.68, with a high of $32 and a low of $17.
Analyst Ratings Through the Quarter
In August, the company received a downgrade from Baird and Barclays. Baird downgraded INTC from Outperform to Neutral, and Barclays lowered the shares from Overweight to Equal Weight.
Miller Tabak also lowered their price target on the shares from $25 to $24, and they also think that Intel will post a Q3 EPS of $0.50 on revs of $11.2 billion. This is down from their previous estimates of $0.57 and revs of $11.8 billion.
At the end of August, Lazard Capital downgraded the shares from Buy to Hold.
In early September, UBS downgraded Intel from Buy to Neutral.
Davenport lowered from Buy to Neutral in mid-September.
Finally, notably, at the end of September, Needham & Company maintained their Buy rating on Intel, but lowered their price target from $25 to $23, which is a reflection of their estimates for weaker demand in the third and fourth quarter.
Summary
Intel made some acquisitions through the quarter, buying Infineon's Wireless Business for $1.4 billion and McAfee for $8 billion. They also formed a joint healthcare venture with General Electric (NYSE: GE), and a mobile O/S collaboration with Nokia (NYSE: NOK).
At the end of August, the company lowered their Q3 outlook, and now sees revs of $10.8 - $11.2 billion, compared to $11.2 - $12.0 billion previously. Gross margins are expected to be in a range of 64% - 68%.
Deutsche Bank notes that at Intel Developer Forum, management indicated that any softness in PC demand "is limited to clients as Intel's Data Center Business continues to see strong demand for Xeon MPUs across servers, storage, and increasingly networking products." Key focus items should be PC Unit growth, full year GM outlook, share loss/gains versus AMD (NYSE: AMD), product mix, and inventories.
Intel Corporation is expected to release their Q310 earnings on Tuesday, October 12, 2010, at approximately 4:00pm EDT. Stay tuned to StreetInsider.com's EPS Central section to see our analysis of the highly-anticipated quarterly results within seconds of their release.
Intel is expected to report an EPS of $0.50 on revs of $11 billion. Last quarter, the company reported an EPS of $0.51 on $10.8 billion in revs. CEO Paul Otellini said it was the company's best quarter in their 42-year history. One year ago, for Q309, the company posted an EPS of $0.35 and revs of $10.2 billion.
Shares of Intel have gained modestly though the quarter ending 0.5% to $19.20 on September 30, 2010. Shares are currently trading 3.6% lower YTD, and up 2.4% since the end of the quarter.
Data from Bloomberg has 31 analysts with a Buy rating, 19 with a Hold, and two suggesting to Sell. The analyst price target average is $23.68, with a high of $32 and a low of $17.
Analyst Ratings Through the Quarter
In August, the company received a downgrade from Baird and Barclays. Baird downgraded INTC from Outperform to Neutral, and Barclays lowered the shares from Overweight to Equal Weight.
Miller Tabak also lowered their price target on the shares from $25 to $24, and they also think that Intel will post a Q3 EPS of $0.50 on revs of $11.2 billion. This is down from their previous estimates of $0.57 and revs of $11.8 billion.
At the end of August, Lazard Capital downgraded the shares from Buy to Hold.
In early September, UBS downgraded Intel from Buy to Neutral.
Davenport lowered from Buy to Neutral in mid-September.
Finally, notably, at the end of September, Needham & Company maintained their Buy rating on Intel, but lowered their price target from $25 to $23, which is a reflection of their estimates for weaker demand in the third and fourth quarter.
Summary
Intel made some acquisitions through the quarter, buying Infineon's Wireless Business for $1.4 billion and McAfee for $8 billion. They also formed a joint healthcare venture with General Electric (NYSE: GE), and a mobile O/S collaboration with Nokia (NYSE: NOK).
At the end of August, the company lowered their Q3 outlook, and now sees revs of $10.8 - $11.2 billion, compared to $11.2 - $12.0 billion previously. Gross margins are expected to be in a range of 64% - 68%.
Deutsche Bank notes that at Intel Developer Forum, management indicated that any softness in PC demand "is limited to clients as Intel's Data Center Business continues to see strong demand for Xeon MPUs across servers, storage, and increasingly networking products." Key focus items should be PC Unit growth, full year GM outlook, share loss/gains versus AMD (NYSE: AMD), product mix, and inventories.
Intel Corporation is expected to release their Q310 earnings on Tuesday, October 12, 2010, at approximately 4:00pm EDT. Stay tuned to StreetInsider.com's EPS Central section to see our analysis of the highly-anticipated quarterly results within seconds of their release.
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