Thursday, January 04, 2007

Calls of Note Part 2

- Banc of America notes their industry/channel checks suggest that Intel's (NASDAQ:INTC) Dec qtr revs finished at $9.6b (+10% Q/Q) - or near the high end of guidance ($9.1-9.7b).

Specifically, checks suggest that Intel benefited from a stronger uptake of Core 2 Duo mobile
processors (Merom), as well as stronger momentum in servers (driven in part by share gains versus AMD). Given the strength in notebooks & servers they expect Q4 gross margin to benefit from improved mix. Consequently, they expect Q4 GAAP gross margin to clock in at ~52% vs. the mid-pt of guidance of 50%. Finally, from a geographic standpoint, most of the strength was witnessed outside North America, with Europe & APAC exhibiting relative outperformance.

The firm is raising their above-consensus 4Q rev. est. to $9.6b, and tweaking GAAP EPS est. higher to $0.27 (Street: $0.25). Firm's new CY07 GAAP EPS est. of $1.27, up from $1.25, remains comfortably above consensus ($1.11). They note that this marks their 2nd upward rev. to Intel's est. in less than a month.

Maintains Buy and Top Pick status. Tgt $28.

Notablecalls: Most certainly good to know category. I would not be surprised to see some buy interest in INTC early on as it looks like INTC is regaining some ground vs AMD.

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