Needham & Company Thinks Intel (INTC) Will Preannounce Later This Week

Needham & Company analyst, Quinn Bolton, cut estimates on Intel (NASDAQ: INTC) due to weak Taiwanese notebook ODM shipments and the potential for a pause in Data Center purchasing ahead of the expected March 31 launch of Intel's Broadwell server CPU. Revenue and NG EPS estimates go to $13.6bn/$0.46 from $14.1bn/$0.51; the low-end of management's 1Q16 guidance.

The reduction in notebook shipments is likely due to inventory clearance in the PC channel and since he expects DCG sales to pick up following the Broadwell launch, there were no changes to 2Q16, 3Q16 and 4Q16 estimates. Since Intel is set to enter its quiet period at the close of business on March 18, the analyst thinks "the company may pre-announce 1Q16 results later this week".

Notebook ODM shipments declined meaningfully Q/Q and Y/Y in Jan and Feb. Cumulative shipments in January and February from Taiwan's five leading notebook ODMs declined 32.7% and 15.7%, respectively, from the year prior and quarter prior periods.

Intel is expected to formally launch its Broadwell server processor on March 31st. With enterprise remaining weak during 1Q16 and anticipating some customers may delay purchases ahead of the Broadwell launch, the analyst reduced his 1Q16 DCG revenue estimates by $100MM.

The firm maintained a Buy rating and price target of $38 on INTC.

For an analyst ratings summary and ratings history on Intel click here. For more ratings news on Intel click here.

Shares of Intel closed at $31.43 yesterday.

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