Intel (INTC) shares are modestly higher heading into the company’s Q2 earnings report later tonight. The Street consensus is for revenue of $9.32 billion and profits of 25 cents a share. For the September quarter, the Street sees $10.07 billion and 34 cents.
Several analysts provided some last-minute comments on the company this morning.
Needham’s Y. Edwin Mok wrote today that he sees Q2 results and Q3 guidance in line with estimates. Given recent weakness in the stock, he thinks an in-line report could push the stock higher; but he also thinks weak consumer spending could lead to below-seasonal results in the second half. He maintains his Hold rating.
J.P. Morgan chip analyst Christopher Danely expects $9.4 billion and 27 cents, a bit above the consensus, on strength in notebook chips and share gains versus Advanced Micro (AMD). He sees gross margin at the high end of guidance - Intel projected 56% plus or minus a point. Nonetheless, he is concerned that “the market is showing signs of cracking” with Taiwanese motherboard and notebook builds in the second quarter below expectations. He thinks Intel will begin to see weakness late in the third quarter. He remains Neutral on the stock.
Avi Cohen, of Avian Securities, repeated his Positive rating on the stock this morning, citing “an attractive valuation and the seasonally stronger second half of the year.” He expects an in-line Q2 report, “which should be viewed positively in light of what’s happening in the semiconductor space lately.” He notes that INTC continues to gain share from AMD, and that the Atom processor for portable devices “is proving to be more successful than anyone expected.” Biggest concerns, he says, are U.S. macro weakness and trouble in the NAND market.
Wedbush Morgan analyst Patrick Wang also sees Intel reporting in-line earnings and guidance. He thinks Intel is well positioned despite a challenging macro backdrop, and contends the shares are attractive at 13.9x his 2009 EPS estimate.
Pacific Crest’s Michael McConnell says Intel’s earnings could be a near-term catalyst for the semi sector. He says checks indicate Intel’s chipset unit sales rose in the high-teens on a sequential basis in Q2, “which should serve as a precursor for strong CPU unit sales for Intel in Q3, as chipset sales lead CPU sales by 8-12 weeks on average.” He has a Sector Perform rating on the stock, which he thinks has a fair value of about $23.
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