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A Needham analyst trimmed his Intel ( INTC ) Q1 sales views by $500 million Tuesday amid declining PC sales and delayed data center sales, and ahead of the March 31 Broadwell CPU launch. He retained his estimates for the balance of the year, however. In afternoon trading on the stock market today , Intel stock was up a fraction, near 31.50. But shares are down 9% this year on Wall Street due to concerns that PC sales will hit a slump in Q1. Needham’s N. Quinn Bolton is the most recent in a series of analysts to cut expectations. For Q1, Bolton sees $13.6 billion in sales and 46 cents earnings per share ex items, vs. earlier views for $14.1 billion and 50 cents. The largest chunk — $400 million — came out of Intel’s client computing group. Cumulative notebook shipments from Taiwan’s five leading notebook makers fell 32.7% sequentially and 15.7% year over year in January and February, Bolton wrote in a research report. Notebook shipments haven’t been flat in March since 2011. If they are in 2016, he models a 23.3% sequential and 9.7% year-over-year decline in Q1 shipments. Bolton expects Q1 notebook shipments to decline 14.2% quarter over quarter and 3.5% vs. the year-earlier quarter. For Intel, that means $7.44 billion in sales vs. earlier expectations for $7.84 billion. The new model would be relatively flat year over year. He also chopped $100 million off his data center group expectations, noting a potential pause in enterprise data center shopping ahead of the launch of new Intel server chip Broadwell this month. Last year, Intel pulled in $3.7 billion in data center sales. Intel Might Soon Update Its Guidance After Q1, Bolton sees a return to spending. “The weak notebook shipments likely are a result of inventory clearance in the PC channel, and we expect data center group revenue to rebound in Q2 following the Broadwell launch,” he wrote. “We are not changing our Q2, Q3 and Q4 estimates at this time.” Intel could update guidance this week before entering a quarterly quiet period Friday. Per company policy, Intel updates guidance if business appears to be tracking outside the range of original expectations. In January, Intel guided to $14.1 billion, plus or minus $500 million, in current-quarter sales. “Should the company enter the quiet period with no revision to guidance, our new estimates will likely prove conservative,” Bolton wrote. Last month, Nomura analyst Romit Shah lowered his Q1 sales forecast for Intel , modeling a 20% sequential decline vs. earlier views for a 7% decline. In January, a Citigroup analyst modeled a 20%-25% quarter-over-quarter fall in Q1 notebook shipments. But, like Bolton, Shah retained his buy rating on Intel stock, noting Q1 is typically a “back-end loaded quarter.” Scalper1 News
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