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Analyst tames forecasts for two major firms

Posted: 13 Nov 2008 ?? ?Print Version ?Bookmark and Share

Keywords:microprocessor? PC demand? revenue?

An analyst cut revenue and earnings forecasts for microprocessor vendors Intel Corp. and Advanced Micro Devices Inc. (AMD), citing lower PC demand.

Craig Berger, analyst with FBR Research, wrote in reports that recent checks into Q4 PC builds by the leading desktop and notebook firms found "significantly weaker" demand than what existed a month ago.

Berger said he now expects Q4 notebook sales to grow 5 percent sequentially, down from the 12 percent growth that FBR forecast last month. He anticipates Q4 desktop PC unit sales to decline 15 percent sequentially after calling for a 6 percent drop last month. The firm now sees overall Q4 PC sales to decline 5 percent sequentially after last month estimating 3 percent growth.

Intel and AMD were among the first firms to present Q4 guidance in mid-October, Berger said, and FBR is slashing its estimates as demand has been down materially since then.

FBR cut its Q4 revenue estimate for Intel to $9.8 billion from $10.4 billion and cut proforma estimates for earnings per share to $0.30 cents from $0.36 cents. He added that he expected Intel to lower its revenue guidance for the quarter on Dec. 4.

The company pleasantly surprised many analysts and observers on Oct. 14 when it guided for Q4 revenue to be anywhere from up 7 percent to down 1 percent sequentially. Citing an increase revenue growth from microprocessors and chipsets for mobile computing, Intel posted a $2-billion profit on revenue of $10.2 billion in Q3.

For 2009, Berger now expects Intel's revenue to decline 3.9 percent to $37.7 billion after earlier predicting the company's 2009 revenue would increase 1.5 percent to 40.3 billion.

Berger cut FBR's estimate for AMD's current quarter revenue to $1.48 billion from $1.55 billion and cut proforma estimates for earnings per share to $0.19 cents from $0.24 cents. Berger now sees AMD's 2009 revenue to decline 6.3 percent from 2008, cutting his estimate to $5.55 billion from $5.78 billion.

Also citing PC checks, Tim Luke, analyst, Barclays Capital, revised his firm's estimates for Intel and said he expects the number one chipmaker to modify its Q4 forecast on Dec. 4, when it had earlier said it would provide an update.

- Dylan McGrath
EE Times





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