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Intel (NASDAQ:INTC) is expected to report Q4 earnings after market close Thursday, January 15, with a conference call scheduled for 5:30 pm ET.


The consensus estimate is 4c for EPS and $8.21B for revenue, according to First Call. Intel revised its Q4 sales guidance twice due to deteriorating market conditions. In November, Intel reduced its Q4 revenue outlook to $8.7B to $9.3B. Then, last week, Intel preannounced Q4 revenue of $8.2B. The adjustments were especially noteworthy given the fact that Intel formally stopped offering mid-quarter updates in 2006. Intel sees spending of about $3.6B, lower than its prior $2.8B expectation. Gross margins are seen at the bottom end of its prior ~55% view. Analysts will be listening closely to management's tone about when it expects the downturn to ease. Intel's forecasts reflect on the projected health of the PC industry as a whole, so management's sentiment will help frame Wall Street's thinking about how intense the downturn in the technology sector is expected to get.

Analyst Views

Caris believes higher than seasonal inventory levels, weakening end market demand, and low visibility will lead Intel to guide Q1 results below current consensus estimates of 12c on$7.31B in revenue. Jefferies expects Intel's Q1 guidance will be down 15%-20% quarter over quarter and maintains an Underperform rating on the stock.

Also, PacCrest recently lowered its estimates for Intel after its channel checks indicated the company planned to cut prices on its quad-core, dual-core and Xeon processors on Jan. 18. Key items for the conference call: forward guidance; impacts of demand on gross margin and inventory; an update on the Atom processor, NAND pricing, demand trends, pricing; details on the ramp of new products, new market opportunities, and its legal initiative regarding its AMD (NASDAQ:AMD) manufacturing joint venture.