Intel, AMD Earnings Expectation Cut, Nvidia Downgraded
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.
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.
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
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.
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
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.
The same specs?!? Apple's main selling feature for their 15" Pros is the retina display and I don't think anyone else is offering a matching screen yet.
I think Apple (most likely unwillingly) laid a mean marketing trap to other manufacturers. Apple's goods are perceived as being very expensive but very high quality as well. However, in the last few years they've been pricing their products pretty competitively, although a lot of folks would not agree. Apple also explored many new niche sectors very suitable for their customer base (luxury tablets - and tablets are only that, ultra portable laptops). Their competitors were natively drawn in to COMPETE effectively for Apple's natural customer base. Unfortunately for the competitors they not only failed to compete in prices, but failed to match the quality (especially build quality and ease of use). And they were competing with Apple for customers that are naturally drawn to the latter being perceived as expensive (which is not a factor in this specific competition as we are looking at a high end market) but making quality products.
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.
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.
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.
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.
Nvidia GPUs on Intel's badass 14nm process line? GG noobs.
no, it play farm valley!