Analyst: Intel Talking Up Pentium 4
Sales
(01/11/01, 5:10 p.m. ET) By Ken Schachter, TechWeb Finance
Intel Corp. is telling PC makers that it could sell 18 million
to 20 million Pentium 4 microprocessors in 2001, a Merrill
Lynch analyst said.
In a research note, analyst Joe Osha said that sales pace
eclipses his current model, which calls for sales of 15
million Pentium 4s, and could raise "interesting
implications" for Intel (stock: INTC).
One possibility is that Intel is merely promoting the
microprocessor in an attempt to thwart inroads by rival
Advanced Micro Devices Inc. (stock: AMD), he said.
Alternatively, Intel could plan to "take a substantial hit to
gross margin in 2001 in order to establish P4 in the
market" even before the transition to a lower-cost
manufacturing process.
Osha made his comments in a note in which he trimmed
his revenue and earnings-per-share estimates for Intel as
well as AMD, Analog Devices Inc. (stock: ADI), and Texas
Instruments Inc. (stock: TXN).
Osha cut Intel's calendar year 2001 earnings-per-share
estimate from $1.56 to $1.41, compared to a consensus
estimate of $1.50.
He revised his estimate form AMD, Sunnyvale, Calif., from
$2.66 to $2.43 vs. a consensus estimate of $2.04.
The EPS estimate for Analog Devices, Norwood, Mass.,
was cut by 19 cents to $2.39 while the consensus is at
$2.66, and the estimate for Texas Instruments, Dallas,
was sheared by 21 cents to $1.40, with the consensus
standing at $1.51.
"Despite the fact that earnings expectations for many of
the companies under our coverage have been adjusted
downwards for the fourth quarter already," Osha said that
consensus earnings estimates remain too high.
Osha also said that AMD is "positioned to take market
share away from Intel" on low-end microprocessors. Still,
he cut his estimates for first-quarter sales of the K7 chip
from 7.2 million to 5.5 million.
Also trimming his outlook on Intel, Santa Clara, Calif.,
was Salomon Smith Barney analyst Jonathan Joseph,
who cut his first-quarter earnings-per-share estimate from
35 cents to 30 cents.
Joseph also cut his 2001 EPS estimate from $1.42 to
$1.25. But he retained his fourth-quarter EPS number of
38 cents on revenues of $8.73 billion.
Despite the cautionary comments, Intel climbed 3/4 to 33
3/4 in Nasdaq trading Thursday. |
