Thursday, January 11, 2007

Calls of Note Part 5

- ThinkEquity's Eric Ross is out with a major intraday call saying they heard from sources at the Consumer Electronics Show (CES) and elsewhere that Intel (NASDAQ:INTC) could see December-quarter revenues nearer to the low end of its range ($9.1b) rather than the midpoint of $9.4b or Consensus of $9.45b. Even with stronger gross margins, they still do not see EPS reaching above $0.23 vs. $0.25 for Consensus, without some financial engineering. While they would not short Intel into the quarter due to this (or change rating), it is possible for the shares to fall a bit.

Firm now believes December-quarter revenues are likely to be $9.25b (firm's new number) or lower. Consensus is $9.45b and $0.25 for the December quarter. These are sources both inside the company and in the electronics supply chain. They actually heard numbers as low as $9.10b for Intel's December quarter from their sources.

For high-end products, the quarter was very back-end loaded. They heard that high-end product such as Conroe (Core 2 Duo) for desktop saw weak October and November sales. Demand picked up sharply in December. Firm believes this is consistent with the build for Vista they have heard elsewhere, but are not certain this reflected real demand.

For low-end products, demand fell in December. Low-end demand for Intel appeared to have dried up in December after a strong October and November. This is consistent with what they have heard from other suppliers in the channel.

Mr. Ross believes Intel is winning back some higher-profile PC models from Advanced Micro Devices (NYSE:AMD), but due to its aggressive sales and pricing. He expects with these share losses by AMD (coming), we could see another aggressive pricing competition year.

Notablecalls: Considering most firms expect INTC to come in at least in-line I think Eric's comments will get some attention. Would not be surprised to see weakness in INTC following the call.

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