ALL: Yahoo article on possible explanations for today's move down (I say who cares... $10/share eps, even at conservative 18 p/e, we're in the money big...)
Wednesday January 15 11:21 AM EST
Intel Corp checked by concern over Q1 revs
NEW YORK, Jan 15 (Reuter) - Trading in Intel Corp was heavy the morning after release of its fourth quarter earnings, but the stock was little changed in the early going as concerns arose over projected flat first quarter revenues.
Intel shares seesawed between positive and negative territory. At 1040 EST/1540 GMT the stock was down 1-1/8 at 146 on volume of 11 million shares.
On Tuesday Intel reported fourth quarter profits nearly doubled from a year earlier. But traders said that while $2.13 per share exceeded Wall Street's consensus estimate, it was shy of the whispered expectation of $2.50.
While most analysts remained bullish about the stock for the long-term, most were content to fine-tune earnings estimates and leave ratings unchanged.
Cowen & Co analyst Drew Peck stood out from the pack by lowering his rating on the stock to buy from strong buy, citing concerns about Intel's capacity to sustain gross profit margins and revenue growth in the first quarter.
Soundview analyst Scott Randall said some of the good news may have already been discounted. In addition, he said that "investors who look at sequential growth as a key metric aren't going to see it in Q1."
But he said he disagreed with such investors. "They are missing the bigger picture in terms of Intel's dominant postion in the marketplace," he said. "The real issue to contemplate is the gross margin of 63 percent."
He was referring to Intel's reported fourth quarter profit margin.
In earnings release, the company said it expected to see sustained gross margins for 1997 of about 60 percent, plus or minus a few points.
Reflecting his optimism about margins, Randall raised his first quarter 1997 earnings estimate to $2.11 a share from $1.87.
The Soundview analyst also raised his 1997 estimate to $8.75 a share from $7.92, and his 1998 estimate to $10.60 from $10.
Even Cowen's Peck pushed up his earnings estimate for 1997 to $8.10 a share from $7.80.
((-- E. Auchard, Wall Street Bureau, 212-859-1736)) |
