Intel, AMD Earnings Expectation Cut, Nvidia Downgraded

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.

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  • aznshinobi
    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.
    23
  • s3anister
    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
  • Sakkura
    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.
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  • Other Comments
  • shin0bi272
    Maybe 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.
    -25
  • aznshinobi
    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.
    23
  • JeanLuc
    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.
    9