EArnings from whisper.com:
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Despite last quarter's negative earnings surprise, analysts are once
again expecting Intel (INTC) to report earnings slightly ahead of the
consensus estimates when the company reports after the market close on
Tuesday. Shortly after Intel's last earnings report, a few analysts started
lowering their expectations for the quarter, but the consensus estimate
remained around $0.56 per share for several weeks. Then Barron's gave a less
than favorable story about the company last week and pushed the analysts to
start commenting in defense of the company. One analyst said that the
Barron's article was "mostly fiction" while others said there was nothing
new in the article. The consensus estimate increased a penny to $0.57 as the
new reports were issued. Still, the consensus estimate appears to be held
low by analysts like Kenneth Pearlman at CIBC World Markets, whose estimate
of $0.53 is at the bottom of the pack. Most analysts have estimates of
around $0.59, citing strong unit growth and market share gains during the
quarter. Many of the analysts with estimates below $0.59 have told their
clients that Intel will exceed their estimates. The top estimate is $0.61
and the Earnings Whisper number is $0.60 on $7.3 billion in revenues due to
unit growth "well above historical trends" as U.S. Bancorp Piper Jaffray
said in their research report last week. Other analysts have said that the
semiconductor demand is the best it has been in several years and David Wu
at ABN-AMRO reportedly told clients that the only surprise will be if Intel
doesn't beat the estimates.
However, analysts won't be focusing on earnings or even revenues this
quarter, but rather CFO Andy Bryant's comments about the Taiwan earthquake's
effects on fourth quarter earnings. You may listen to Intel's conference
call beginning at 5:30 PM EST on Tuesday at
nasdaq-amex.com;
There are mixed expectations for Motorola (MOT), which is also
reporting earnings after the market close on Tuesday. Among the 26 analysts
covering the company, Charles DiSanza of Gerard Klauer has the highest
official estimate with $0.56 per share, but there are a lot more analysts
reporting expectations of $0.51 per share. Keep in mind though that many of
these analysts also expect the company to report a surprise. Continued high
margins, strong semi-conductor business, favorable currency exchanges, and
increased sales in the highly profitable digital handsets are all expected
to contribut to the expected "surprise." Tim Luke at Lehman Brothers, Robert
Wilkes at Brown Brothers, and Marc Cabi at CS First Boston are some of the
analysts that have reportedly told their clients over the past several days
that the company will report strong earnings and likely surprise are. We
were unable to confirm these expectations, but Seth E. Potter at Sands
Brothers, whose report on September 17th indicated an expectation of $0.51,
told EarningsWhispers.com last week that handset sales were very strong and
earnings will come in between $0.51 to $0.54. Overall, the whispers seem to
be slightly higher and the Earnings Whisper number is $0.55.
Motorola's conference call will be broadcast at 8:00 AM EST on
Wednesday at webevents.broadcast.com
Analysts started raising estimates for International Paper (IP) a few
weeks ago, but they may not have raised the estimates enough. Matthew K.
Berler at Morgan Stanley Dean Witter started the increases in estimates when
he issued a report on September 10th with estimates of $0.40 per share.
Since then, several other analysts followed and the consensus estimate has
gone from $0.37 to $0.40. Earnings estimates of $0.40 per share may still be
low due to the company's efforts to cut costs being ahead of schedule,
demand is picking up in Asia, paper prices have increased, and the U.S.
housing market has increased demand for IP's wood products. Look for the
company to report earnings of $0.42 or better - the top whisper we heard was
$0.44.
The question around Seagate's (SEG) upcoming earnings has gone from
"how much will they earn" to "how much will they lose" after estimates have
gone from as high as $0.45 to as low as a $0.15 loss. The consensus has now
stabilized around a loss of $0.09. Jeff Van Rhee of Olde Discount Corp told
EarningsWhispers.com that unit volume will not be as expected and as long as
companies like Compaq and Hewlett Packard are aware of the company's excess
supply, Seagate will not be able to raise prices. The only surprise will
come from the company's ability to cut costs during the quarter. Our
Earnings Whisper number is for a loss of $0.07, after being lowered within
the past few days, but don't be too surprised if the company loses even more
this quarter.
Even should Seagate posts negative surprises for the quarter, Mr. Van
Rhee pointed out to us that the company's equity positions in firms like
SanDisk and Gadzooks make Seagate undervalued despite the current disk drive
business, so don't expect the stock to take much of a dive if they do not
meet estimates or whispers.
Seagate's 5:00 PM EST conference call can be heard by calling (800)
230-1059. A replay of the conference call will be available at 8:00 PM EST
and may be accessed at (800) 475-6701 with the password 470975.
Despite strong earnings surprises by the entire brokerage industry
last quarter, the expectations do not call for the same to happen this
quarter. Two of the largest, Merrill Lynch (MER) and PaineWebber (PWJ), are
expected to report on Tuesday. These reports will likely affect the
expectations for the subsequent earnings reports within the industry.
Merrill Lynch has seen some recent downgrades and lowered earnings estimates
during the past few weeks. Most notable was Henry McVey of Morgan Stanley
Dean Witter who lowered his estimate from $1.34 to $1.28. This is one penny
below the consensus estimate of $1.29 with the top estimate reaching $1.35
and the low estimate being $1.23. We've heard some whispers that Merrill
Lynch will report earnings of $1.36, but some of the most recent whispers
have indicated that the company will report earnings inline with the
consensus number. Our Earnings Whisper number is currently $1.32.
The analysts appear to be much more optimistic with PaineWebber, but
that has not stopped the consensus estimate from starting at $0.83 three
months ago to $0.89 a few weeks ago and now back down to $0.83. The Earnings
Whisper number for PaineWebber is now $0.90. |
