Sign in with
Sign up | Sign in

Intel, AMD Earnings Expectation Cut, Nvidia Downgraded

By - Source: Forbes | B 27 comments

Intel and AMD are due to report their second quarter earnings this week.

Analysts are not too optimistic that the chip makers will be able to please investors. Forbes is reporting that Bernstein Research has cut estimates for both companies. Analyst Stacy Rasgon said that he now expects Intel to post a profit of $2.44 per share, instead of $2.48, while AMD is forecasted at $0.52 instead of $0.90.

"We have taken our Q3 numbers for Intel down (as has much of the Street as of late), and would not be surprised (given PC data points) to see some caution in the guide, or at the very least to see a reduction in full-year expectations (currently for ‘high single digit’ growth), given we believe upside forthcoming from HDD snapback appears increasingly unlikely, and we remain unconvinced that Ultrabooks and Windows 8 will drive significant excess volume particularly given the high price points of reasonably-specced, touch-enabled systems," Rasgon wrote in a note to clients. "We would note that, given how bad AMD’s performance was, whatever Intel says is likely to look good by comparison."

Meanwhile, Nvidia could be following, as TheStreet downgraded Nvidia stock from Buy to Hold. TheStreet said that it found "weaknesses including unimpressive growth in net income, weak operating cash flow and a generally disappointing performance in the stock itself."

The rather cautious analyst notes are released on the heels of Q2 PC shipment estimates that were lower than initially expected. Especially Ultrabook sales have been in the crosshairs and there is reasonable doubt surfacing whether this notebook class is taking off as well as anticipated by Intel. Pat Moorhead, formerly an executive with AMD and now an industry analyst, says that the idea that Ultrabooks are failing is false, mainly, because there has been no significant supply of Ivy Bridge Ultrabooks in Q2.

As true as this statement is, it may not help Intel that much during earnings call week if PC sales are, in fact, stagnating. Given the huge expectations Intel has built around the Ultrabook class, there will be questions as to why sales are not increasing at a much faster pace.

Display 27 Comments.
This thread is closed for comments
Top Comments
  • 23 Hide
    aznshinobi , July 16, 2012 9:19 PM
    Ultrabooks aren't falling short imo. They perform well and I've seen the benches, they are amazing. It is just the prices are a bit too high and consumers are being brainwashed. A 15" Macbook Pro is $2000 yet people choose that over a same spec'd Asus Zenbook Prime for about $500-$600 less. Granted the Ultrabooks are 2" smaller. But still... IT MAKES 0 SENSE TO ME. Sigh, the ignorance of consumers.
  • 18 Hide
    s3anister , July 16, 2012 9:35 PM
    aznshinobiUltrabooks aren't falling short imo. They perform well and I've seen the benches, they are amazing. It is just the prices are a bit too high and consumers are being brainwashed. A 15" Macbook Pro is $2000 yet people choose that over a same spec'd Asus Zenbook Prime for about $500-$600 less. Granted the Ultrabooks are 2" smaller. But still... IT MAKES 0 SENSE TO ME. Sigh, the ignorance of consumers.

    Hey, come on. If I didn't buy the Macbook Pro I wouldn't be able to say I have a $2000 facebook machine.

    /end sarcasm
  • 18 Hide
    Sakkura , July 16, 2012 9:36 PM
    shin0bi272Maybe nvidia should have put a 384bit or higher mem bus on the 680 after all... Then maybe they would have seen more positive cash flow... I know its the only reason I didnt buy one.

    Regardless of the memory bus, the GTX 680 is a niche product that was never going to make up a significant part of Nvidia's revenue. The mainstream and low-end is where the real money is in the consumer market.
Other Comments
  • 23 Hide
    aznshinobi , July 16, 2012 9:19 PM
    Ultrabooks aren't falling short imo. They perform well and I've seen the benches, they are amazing. It is just the prices are a bit too high and consumers are being brainwashed. A 15" Macbook Pro is $2000 yet people choose that over a same spec'd Asus Zenbook Prime for about $500-$600 less. Granted the Ultrabooks are 2" smaller. But still... IT MAKES 0 SENSE TO ME. Sigh, the ignorance of consumers.
  • 9 Hide
    JeanLuc , July 16, 2012 9:34 PM
    shin0bi272Maybe nvidia should have put a 384bit or higher mem bus on the 680 after all... Then maybe they would have seen more positive cash flow... I know its the only reason I didnt buy one.


    I really doubt a massive fall in Nvidia's cash reserves could be contributed to it's choice of memory bus for one of it's many products.

    The story is really only a reflection of the sign of times we find ourselves living in. The Eurozone is in tatters, in the US the recovery is stalling and even in China economic growth is slowing down, all these macro economic issues are bound to be felt somewhere so it's no surprise these traditional chip makers are feeling the pinch.
  • 18 Hide
    s3anister , July 16, 2012 9:35 PM
    aznshinobiUltrabooks aren't falling short imo. They perform well and I've seen the benches, they are amazing. It is just the prices are a bit too high and consumers are being brainwashed. A 15" Macbook Pro is $2000 yet people choose that over a same spec'd Asus Zenbook Prime for about $500-$600 less. Granted the Ultrabooks are 2" smaller. But still... IT MAKES 0 SENSE TO ME. Sigh, the ignorance of consumers.

    Hey, come on. If I didn't buy the Macbook Pro I wouldn't be able to say I have a $2000 facebook machine.

    /end sarcasm
  • 18 Hide
    Sakkura , July 16, 2012 9:36 PM
    shin0bi272Maybe nvidia should have put a 384bit or higher mem bus on the 680 after all... Then maybe they would have seen more positive cash flow... I know its the only reason I didnt buy one.

    Regardless of the memory bus, the GTX 680 is a niche product that was never going to make up a significant part of Nvidia's revenue. The mainstream and low-end is where the real money is in the consumer market.
  • 3 Hide
    hotroderx , July 16, 2012 9:41 PM
    I see this as a positive for AMD maybe this is the little bit of breathing room they need to stay afloat. I said it before the day AMD goes out of business is the day consumers ever where suffer horribly in the PC market.
  • -9 Hide
    amkronos , July 16, 2012 9:49 PM
    AMD screwed the pooch with the bulldozer series of chips and this is the price they pay for not being able to compete with Intel's iSeries of processors. The only saving grace is their GPU's, but nVidia continues to thwart them at the high end niche market there as well.

  • -8 Hide
    shin0bi272 , July 16, 2012 10:00 PM
    SakkuraRegardless of the memory bus, the GTX 680 is a niche product that was never going to make up a significant part of Nvidia's revenue. The mainstream and low-end is where the real money is in the consumer market.

    the "mainstream and low end" cards are the same chip just some smx's disabled and lower core clock speed hence the virtually identical scores of the 670 and 680. For every person who bought a 680 there were probably 5 who didnt not only because of the bus but also due to the limited supply for over 2 months. So even those that wanted one couldnt get one till after the 670 came out and lo and behold the early adopters (who traditionally pay for all the R&D and so on) put the breaks on their enthusiasm and their ordering. Ive got the cash in my pocket right now for a 680 but I refuse to buy one since its bottle necked and they all but just announced the 700 series with the announcement of the 660ti. What youre forgetting is that the people who play pc games are largely college educated and the 4 year degree holding people have less than 4% national unemployment. Sure nvidia can sell more of the mid and low range cards but they dont have the profit margin of the higher end chips. That means they have to sell more of them to make a profit. So on a macro economic scale Nvidia stepped in it big time. Intel on the other hand had record sales last year or the year before so of course they're going to come down a bit.
  • 4 Hide
    rantoc , July 16, 2012 10:01 PM
    The issue Nvidia have is chip yields at TSMC and it is out of their control, they have a great and efficient design in the 6xx GF but can't get chips in sufficient quantity's. AMD is in the same situation with the Radeon's - hampered by TSMC's poor yields. As for Intel, they likely did SB to well and it is not much performance upgrade in the ivy beside some added efficiency so its hardly surprising they don't sell as much when the enthusiasts don't upgrade from SB.
  • 8 Hide
    A Bad Day , July 16, 2012 10:15 PM
    shin0bi272Maybe nvidia should have put a 384bit or higher mem bus on the 680 after all... Then maybe they would have seen more positive cash flow... I know its the only reason I didnt buy one.


    Slightly improving high end products aren't going to turn around a financial problem. The main money maker is the mobile and other low-end stuff.
  • 3 Hide
    Anonymous , July 16, 2012 10:37 PM
    "I see this as a positive for AMD maybe this is the little bit of breathing room they need to stay afloat. I said it before the day AMD goes out of business is the day consumers ever where suffer horribly in the PC market. "

    The only reason Nvidia got downgraded was because AMD already came out and said they stunk it up this quarter, and they figure Nvidia is in the same boat.
  • 1 Hide
    DRosencraft , July 16, 2012 10:52 PM
    HotRoderxI see this as a positive for AMD maybe this is the little bit of breathing room they need to stay afloat. I said it before the day AMD goes out of business is the day consumers ever where suffer horribly in the PC market.


    I don't know how much of a breather it will be when their earnings miss is set to be so huge. They're forecasting a $0.04 miss for Intel, but a $0.38 miss for AMD. The only way AMD will benefit from any of this news this week is if Intel and Nvidia news drowns out AMD's lack luster performance. I do agree with you, however. Even if you don't like AMD, if AMD goes under then everyone is going to end up paying more.
  • -8 Hide
    jkflipflop98 , July 16, 2012 11:09 PM
    I hope Intel buys Nvidia.

    Nvidia GPUs on Intel's badass 14nm process line? GG noobs.
  • -1 Hide
    Anonymous , July 16, 2012 11:53 PM
    Overpriced intel chipsets an cpu's,crappy displays on expensive ultrabooks...aside from the nvidia fiasco stigma....no thanks...not worth the money they ask...
  • -6 Hide
    ananke , July 17, 2012 12:17 AM
    Apple products retain value, two years later that MacPro is resell-able for almost the original price. It is like Japanese cars. You buy it, because down the road you get your money back. I know no other consumer electronics that can retain value.
  • 0 Hide
    tomfreak , July 17, 2012 3:02 AM
    AnankeApple products retain value, two years later that MacPro is resell-able for almost the original price. It is like Japanese cars. You buy it, because down the road you get your money back. I know no other consumer electronics that can retain value.
    but u pay almost 500-750 premium on Macbookpro. The same spec laptop are 500-750 less. I can live without mac for 500-750.
  • 3 Hide
    bspatial , July 17, 2012 4:24 AM
    But can Macbook pro play Crysis?
  • 0 Hide
    sonofliberty08 , July 17, 2012 4:55 AM
    bspatialBut can Macbook pro play Crysis?

    no, it play farm valley!
  • 2 Hide
    sha7bot , July 17, 2012 5:19 AM
    AMD won't be going out of business any time soon. Their GPU market will keep them afloat for many years to come and their APU market could gain traction if the ARM deal works out. If they manage to get two GPUs in the x-box 720, then they'll be golden for at least 7 years to come.
Display more comments