Apr 10, 2012
3:35 PM
INTC: Bulls See Q1 Lifted by Hard Disk Improvement; Q2 Rides ‘Romley’
By Tiernan Ray
A number of folks on the Street today offered up their expectations for Intel’s (INTC) Q1 results
The focus is on how an improving disk drive supply, following severe shortages in the fall and winter, may help Intel’s PC market numbers. Looking forward to this quarter’s results, it’s mostly all about Intel’s recently introduced server processor family, familiarly known as “Romley,” which may surge in sales, some think, after delays last year.
The Street consensus currently is for $12.84 billion in revenue and 50 cents EPS. For Q2, analysts are modeling $13.4 billion and 54 cents.
Doug Freedman, RBC Capital Markets: Reiterates an Outperform rating and raises his price target to $33 from $30. Freedman is modeling $13.06 billion for Q1 and 55 cents, up from a prior $12.7 billion and 50 cents. He raised his Q2 view to $13.5 billion and 58 cents from a prior $13.2 billion and 54 cents. For the full year, he now models $56.94 billion and $2.62 per share, up from a prior $55.86 billion and $2.47. “We believe the mid-point of Intel’s guidance, or $12.8bil (range $12.3bil-$13.3bil), proves to be a low-bar driven primarily by Romley strength, as we believe Enterprise and Data Center markets remain strong […] For Q2, upside could be driven by impact from Ivy Bridge introduction the coming week(s). Due to a delayed launch, we believe initial unit shipments will be material and result in a favorable ASP mix in the quarter and into a seasonally stronger selling season.
Craig Ellis, Caris & Co.: Reiterates a Buy rating and a $32 price target. He’s estimating $12.81 billion and 49 cents for Q1. For Q2, he sees $13.57 billion and 56 cents per share. “We thought PC-related data points improved through the quarter, which against a backdrop of lean channel inventory and low early-quarter ship- ment expectations given HDD supply and macro risks means $200M/$0.01-$0.02 or more of results upside is possi- ble versus our estimate.” For Q2, “HDD output recovery risks have significantly abated, Ivy Bridge and Romley product launches are on track, but on the downside macro risks still persist in Europe and China as does tablet cannibalization.”
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