Monday, July 10, 2006

Calls of Note Part 2

- FBR believes Intel (NASDAQ:INTC) likely achieved the low end of its revenue guidance range for 2Q. While they think consensus estimates come down somewhat, they don't think estimates will come down as much as some had feared, which may act as a short term positive for the stock. However, the firm also thinks that excess inventory has again accumulated in the channel, and the near term demand outlook remains weak, thus creating an overhang for the second half. Net, they would be more inclined to take a positive long-term view on the stock if INTC were to meaningfully lower what the firm believes are extremely aggressive 2H expectations. Based on checks thus far, they don't believe management is ready to throw in the towel, and therefore maintain Market Perform rating.

Notablecalls: Not actionable but good to know category.

- Frederick W. Moran from Stanford Financial Group comments on Audible(NASDAQ:ADBL) ahead of results saying they are concerned that high churn may hinder subscriber gains and revenue growth could moderate.

Firm expects that Audible added about 24,000 net new subscribers during the second quarter, down from 34,000 in the first quarter. This could bring total Audible subscribers to 303,000. According to comScore My Metrix, has seen its unique visitors per month fall from 994,000 in March to 734,000 in April to 516,000 in May. Unique visitor traffic may slow further during the summer. Management provided no guidance for the second quarter, but pledged profitability by year end.

It remains unclear when or if Audible will reach profitability. With roughly $1.72 per share in cash (working capital), Audible trades at a premium valuation of 2x revenue and $550 per subscriber despite having no earnings and requirements for cash. Reits Sell and $6 tgt.

Notablecalls: I'm not sure this one is actionable. But I sure wouldn't want to be long ADBL into

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