In the light of world economy going bonkers, we have entered two really interesting weeks. Intel will submit its Q3 results after the market closes on Tuesday, while AMD will follow suit on Thursday.
I’ve received a preview for both companies from Wedbush Morgan Securities, and in this post you can read estimates researched by Patrick Wang and his assistant Michael Lucarelli. According to Wedbush Morgan, we can expect “weak 3Q results towards the lower end of guidance as the majority of semi companies have not pre-announced but were most likely impacted by the well-documented macro environment.”
With global economy being in chaos, it is no surprise that Wedbush expects that all major semiconductor companies will have to cut 2009 estimates. Patrick states that “utilization will continue its steep decline in 2H08 and into 1H09”.
However, not all is dark – “as estimates come down, we think investors will start feeling more comfortable with traditional valuation metrics and look for stocks with stories that are fundamentally intact but oversold.”. This just might spells good news for semi stocks.
According to Wedbush, Intel will report its Q3 revenue of around $10.15 billion, and profits in the range of around $0.33 per share, down from projected $10.27B with earning per share in the $0.34 range. However, guidance for Q4 is quite conservative, with current estimate being $10.59B (4.4% higher than Q3), below analyst consensus of $10.85B.
When it comes to AMD, Wedbush expects that AMD’s head honchos will be all over Asset Smart/Asset Lite strategy, followed by the positive news of return to profitability. A while ago, while Hector was at the helm of AMD, he made a promise that the company will be profitable in Q3’2008. We cite following part of the report: “we expect AMD to report Q3 revenue and EPS results of $1.46bn / ($0.39) versus consensus of $1.48bn (+10.1% QoQ) / ($0.40).”
So, revenue should be almost 9% up from second quarter, and AMD stock should experience first profit per share in ages – in a tune of almost 40 cents. This resurgence was lead by graphics sales, which rose way above 18% in Q2. AMD pushed Nvidia with its 4800 series of products, and Wedbush now expects that AMD will score Q4 revenue in a tune of $1.57 billion, roughly 15% up from Q2’2008.
I plan to blog from both calls, so stay tuned for news from both camps, and also to see if Wedbush made all the right calls 😉
