Intel Investors - Wall Street "Expectations" for Q3.
Another "dull" scenario (with interesting implications) about Intel's Q3 earnings outlook:
zdnet.com
"Intel has been cautious in terms of the product
transition," said Ashok Kumar, analyst at
brokerage Southcoast Capital. "The trendline
on the average selling price of microprocessors
will fall."
While about 20 percent of the chips that Intel
sold in the third quarter were Pentium IIs -- which
sell for up to $851 -- the average price for all
Intel microprocessors will fall to about $215 in
the quarter from $255 in the second quarter,
Kumar said."
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What is SURPRISING! is the 20% estimate for Intel's Pentium II shipments.
Several sources have cited that Intel should ship 20 to 21 million CPUs this quarter.
Let's assume 20 million. 20% of these is 4,000,000 Pentium IIs!
These sell for $550 - $1000 (233 MHz - 300 MHz). Let's assume an ASP of only $500 (very conservative)!
$500 x 4,000,000 = $2 BILLION in Pentium II sales for Q3 alone!
This represents 33% of all of Q2's revenue - $6,000,000,000!
This is 3.3 TIMES AMD's TOTAL Q3 Revenue ($596 Million)! Just in Pentium IIs!
Somehow these numbers indicate that Pentium II sales should easily make up for the price cut reductions that Intel made in Q3 for its CPUs.
For example, if ASPs were cut by 33% on AVERAGE (and ALL Q2 revenue is assumed x86 revenue - which it isn't), that $6,000,000,000 would now be $4,000,000,000 assuming zero growth in unit shipments.
Assuming most Q2 revenue was not Pentium II related, and adding back in the $2,000,000,000 for Pentium II sales in Q3 (simplified LOW ESTIMATE), we get back to $6 BILLION in revenue.
Add in a little unit growth from Q2 to Q3 and $6+ Billion for Q3 revenue is not hard to come up with.
Although margins may come in to play, I'd say there is a decent chance of Intel reporting very favorable "revenue" for Q3.
Paul |
