The Street offers up a couple different views on the outlook for Intel (INTC) and semiconductors this morning, with the folks at boutique firm BlueFin Research Partners writing that Intel’s chip production has been “steady,” but Raymond James’s Hans Mosesmann cutting his estimates for Intel this quarter to reflect “a weaker-than-expected PC environment.”
The background for all this is the release privately of data by the Semiconductor Industry Association over the weekend that showed slightly better sales of chips in April than is typical for the season, as I noted yesterday. Microprocessor sales were one of the brighter spots, which should be good for Intel.
In a note to clients today, Deutsche Bank analyst Ross Seymore writes that Intel is among his selective Buy ratings to play what he sees as the “muted” semiconductor recovery this year:
YTD semiconductor revenue is running ahead of our estimate (+$2.61b delta) as a strong Jan, Feb & April was partially offset by a slightly weaker March. As a result, we continue to expect a steady recovery for the semi sector and are maintaining our est. for 2012 semi sector growth of +5% (ex-memory +6%).
And a note this morning�from research firm IHS�iSuppli put out a short while ago posits that a rise in semiconductor inventory in Q1 “was driven by the anticipation of higher demand from customers,” according to the firm’s analysis.
To come back to BlueFin, the analysts reiterate an expectation for 4% to 5% revenue growth this quarter, above Intel’s own 2% to 9% forecast but in line with the Street consensus of $13.6 billion, even though there are troubling trends in PCs:
Overall production run rate estimates in May remain steady at Intel. Just as our mid-month checks suggested last week, the overall INTC production run rate estimates remained steady month-on-month in May despite the recent PC softness reported by Dell (DELL), Hewlett-Packard�(HPQ), Lenovo, and our own supply chain checks on forecast reductions in the ODM channel.
However, Mosesmann, who has a Market Perform rating on Intel stock, is more concerned about those PC trends. He cut his 2012 PC growth rate to 5%, below what he says is Intel’s PC growth forecast of 6%, citing weaker data from original design manufacturers:
April sales for notebook ODMs were below seasonal and worse than expectations, leading Wistron to cut its notebook unit forecast from 0-5% q/q growth to flat/potentially down q/q. While notebook sell-in data can be complicated by inventory trends at OEMs and distributors, PC-related comments from OEMs have been relatively conservative. This gives us pause as it relates to Intel�s PC sales going forward, and we believe that management�s 2012 guidance calling for high single-digit growth year-over- year looks aggressive.
Mosesmann cut his estimate for this quarter to $13.45 billion and 50 cents a share from a prior $13.6 billion and 52 cents. The consensus is $13.62 billion and 53 cents.
Intel shares today are up 16 cents, or 0.6%, at $25.20.
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