Richard Davenport

Intel's Earnings Will Benefit the PC Supply Chain

Agreed that SYNA is way oversold. Looking for additional positive PC supply chain data points, as well as solid results from SYNA itself, to rectify that.

PC Market Not Looking Good, Dell Especially

Two further notes on your comment that "AAPL already reported blowout earnings:

1) per my previous comment, supply chain analysis is primarily concerned with money flows between businesses, and hence revenue, not earnings

2) what AAPL did in the Dec Q (the "blowout earnings") is far less relevant than what AAPL believes will happen in the Mar Q. And on a revenue basis, AAPL guided Mar-Q revs -4.9% below Street expectations when it reported 1.21.09. We expected that miss, and since then the Street has been steadily reducing its rev expectations for AAPL: now at $7.939B for FQ2 vs $8.203B when AAPL gave its guidance. DELL's projected miss tonight will be yet another negative data point on the health of the PC supply chain, and while the business side won't be relevatn to AAPL, the consumer side certainly will be.

PC Market Not Looking Good, Dell Especially

Hi bluemarlin, good question, though I disagree with your statement that they're not targeting the same customer. DELL of course has much more business exposure than AAPL (DELL's consumer biz is ~18% of total revs), but both DELL and AAPL target the exact same retail consumer. And DELL has much more PC exposure than does AAPL.

We do supply chain analysis, and as such, analyze the supply chains of thousands of companies globally, and the money flows between them. Thus when we speak of estimates, we're talking about revenues, not earnings. DELL by itself it not a huge predictor of AAPL (although the stock correlation of the 2 companies is 0.91, which is very high); however, they do share a very similar supplier base, including INTC, MU, Samsung, WDC, STX, Quanta, Hon Hai, BRCM, and many more.

We believe DELL will miss Street rev expectations by $1.5B. Any commentary that DELL has on the consumer part of their business has extremely strong implications to AAPL. Given that DELL has a January year, they have an additional month of visibility that we can use to ascertain the health of companies in the PC supply chain that have a Q ending in March, including AAPL.

Advanced Energy Industries: Expect Guidance Below Street

Guides Q1 Well Below Our Street-Low View

Negative semi equipment data point. Q4 revs in line. Q1 rev guidance $30-36M; midpoint $33M -42.6% below Street $57.5M, and below our Street low est of $42-47M. Book-to-bill 0.7:1. CEO Betz: "we continue to see a weak economic outlook that may persist for some time. We will take additional cost reduction measures in the future as needed to drive our breakeven point even lower and address further deterioration in our markets."

Marvell: Negative Outlook for Western Digital, RIMM and Others

Hi Mindspec, I'm not sure how you can judge Connexiti without ever having used it. We certainly do not steal data from anyone. We have more supply chain data than anyone anywhere, and our research calls accurately predict earnings misses with over 90% accuracy. I'm happy to give you a demo--just let me know.

Intel: Don't Buy the CAPEX Head Fake

We don't set price specific price targets. Agreed that INTC's dividend is relatively safe, and they could always reign in their CAPEX spending a bit if they needed to.

There could yet be downside to INTC, however. Street Y/Y rev ests currently call for a decline of just -19.01%. I say "just" because our best-case scenario for Y/Y revs in 2009 for semis at large is -23%, and this estimate increasingly looks like it has downside. You might find our note on this topic interesting: seekingalpha.com/artic...

Street 2009 View Still Too High for Semiconductors

I agree with the market often discounting future earnings trends. I'll point out that the VIX has spiked considerably over the past 5 days, indicating that the Street is finally coming around again to how bad earnings are going to be, which is the point of my note. Semis in particular have dug/are digging a very deep hole. At some point there will be a great buying opportunity, but I don't think we're there yet.

Standard Microsystems: Weak Guidance Negative for PC Supply Chain

Agreed that AAPL may be less affected than Dell or HP. But the Street is still looking for total Dec revs for AAPL up +25% Q/Q, which is only modestly below seasonal norms of +31.5%, and stands in stark contrast to sharply lower guidance from everyone in its supply chain.