/// Amid Slower PC Sales, Chipmakers Intel and AMD Report Earnings

July 20, 2011  |  All Things Digital


Chipmaker Intel will today report results of its second fiscal quarter after the close of markets today, and the expectations aren’t exactly great. Doug Freedman, an analyst who covers the chip sector for Gleacher and Co. in San Francisco, trimmed his estimates on both Intel and on its smaller rival Advanced Micro Devices amid a weakened PC market that is running well behind the typical seasonal patterns. Last week market researcher Gartner reported that worldwide PC shipments grew less than three percent over the year-ago period as consumers remain focused on tablets and smart phones and hold off on upgrading their desktops and notebooks. At a high level, that’s not good news for Intel and AMD, both of which have yet to penetrate the tablet market in any meaningful way. And both are grappling with the impending entrance of competing chips based on the designs from ARM from vendors like Nvidia and Qualcomm burrowing their way into new consumer notebook designs. In a July 15 note to clients, Freedman cut his estimates on Intel and AMD both for the quarter ending in June and the quarter ending in September. He expects Intel to report sales of $12.7 billion, which is about $100 below the street consensus of $12.8 billion. He also expects Intel to report per-share earnings of 53 cents, which would amount to a 2-cent improvement over the year ago quarter. The quarter being reported today isn’t the story however: It’s September. Typically it’s a seasonally strong quarter as college students head back to school with new notebooks under their arms. This year, he thinks PC sales will lag behind historical patterns. He trimmed his September quarter revenue forecast to $13.16 billion down from $13.43 billion, or $300 million below the street view and knocked it down by two cents to 59 cents — or a penny above the street. Intel has in recent quarters taken a fairly aggressive stance on the state of the PC market and has criticized analysts for fanning investor fears.

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Amid Slower PC Sales, Chipmakers Intel and AMD Report Earnings



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