Earnings Preview: Intersil

Oct.22.08 | About: Intersil Corporation (ISIL)

Intersil (NASDAQ:ISIL) is expected to report Q3 earnings Wednesday (Oct. 22) after the closing bell, with a conference call scheduled for 4:45 pm ET.

Guidance

The consensus estimate is 40c for EPS and $220.38M for revenue, according to First Call. Guidance from the last earnings call if for Q3 EPS of 39c to 40c and revenue growth of 1% to 3% from Q2's reported $216.2M, that implies $218.32M to $222.69M.

Analyst Views

Recently there have been a few rating downgrades on the Street. On Sept. 26, Oppenheimer downgraded ISIL based on macro growth concerns and reduced margin expectations. Then on Oct. 6, Citigroup downgraded the shares to a Hold after sector checks indicated product sales softness due to eroding macro indicators. RBC Capital expects ISIL's Q3 to print at low end of guidance and Q4 guidance of down 12% to 16%. The firm is modeling Q3 at $318M and 39c and Q4 at $187M and 20c. They expect the Computer segment down 20% QoQ. RBC's checks show that while end market expectation for NB in Q4 has reduced from up 25% YoY to up 15% YoY, a build-up in channel inventory and caution at ODMs are expected to impact Q4. RBC is modeling Consumer down 10% helped in part due to incremental revenue from PMIC starting in Q4 and hurt due to incremental weakness in LCD. RBC is modeling Industrial and Communication down 12%. Despite the sharp drop in earnings estimates on the Street, RBC believes the underlying financials are in good shape. Strong cash earnings, cash on hand and no debt should allow for a stock buybacks, says RBC Capital. :