altr beats estimates, amd misses, again, qcom splits.
April 14, 1999 7:56 PM EDT
AFTER THE CLOSE ******
AFTER THE CLOSE WRAP: There were several notable tech earnings reports after the close today, including Apple (AAPL), Tellabs (TLAB), and Advanced Micro Devices (AMD). Apple continued its winning streak in Q1, beating estimates by four cents. As with Intel's (INTC) good news yesterday, however, it is doubtful that this report will ignite Apple's stock. Apple beat estimates by an average of 16 cents in the past four quarters, so today's four cent surplus will not impress a market accustomed to more startling reports. Revenue growth was also uninspiring at 8.5% year/year, little changed from the 8.4% growth seen in Q4. On Instinet, AAPL has traded down to 33 7/8 from its close of 35 17/32. Tellabs has long been a Briefing.com favorite in the telecom arena, and it enjoyed another solid quarter, beating estimates by three cents ($0.52 vs $0.49) on solid revenue growth of 43.4%. TLAB's TITAN product line continued to drive strong sales growth, and the company is showing no signs of faltering after last year's brief stumble with its failed attempt to acquire Ciena (CIEN). TLAB was little changed in after hours trading at 109 from the close of 108 5/16. While telecom continues to be one of the hottest sectors, semis have remained unimpressive. After yesterday's underwhelming Intel report, Advanced Micro reported an awful quarter. AMD lost $0.81 a share excluding charges, 10 cents worse than the First Call estimate of -$0.71 and a far cry from the $0.13 profit that had been expected as recently as February 4. After two warnings in Q1, this bad news doesn't come as much of a surprise, but it's fair to ask when AMD can ever make a profit, if not now. Revenue growth was a solid 16.8%, but intense price pressure meant that even double digit revenue growth isn't enough to make AMD profitable. The stock doesn't trade after hours, but closed today at 14 3/4, not bad considering that it was only at 18 15/16 back on Feb 4 when it was thought that the company was making money instead of losing it rapidly. The TLAB/AMD reports support the view that bandwidth (telecom companies) is a better place to be than processor speed (semi companies).
AFTER THE CLOSE ******
INTEL CORP (INTC) 60 1/2: the galaxy's largest chip maker beats estimates by two cents, reporting Q1 EPS of $0.57 versus the First Call estimate of $0.55, but this was not a bullish report for Intel. Revenues rose 18.4% year/year, but were down 6.7% sequentially. Optimists will term this sequential decline a normal seasonal drop, but it was second only to Q4 1998 (-7.8%) as the worst Q4 of the decade, and it was below analysts' estimates. Earnings nevertheless beat expectations due to gross margins, which were 59% relative to Intel's guidance of about 57%. Interest/other income also offered an upside surprise, coming in at $347 mln instead of the expected $200 mln. In short, Intel's upside surprise in Q1 is unimpressive. As for Q2, Intel said that revenues would be "flat to slightly down" from Q1. That is in line with the recent seasonal pattern for Q2, which has seen average sequential declines of 2.8% over the past four years, but it will come as a disappointment for those hoping for an upside surprise. As with Q1, however, margins will remain near 59%, which should produce Q2 EPS of about $0.54, just below the First Call consensus of $0.55 (arrived at by adjusting the $1.11 consensus for the 2-1 split). The reality for Intel and most all participants in the PC sector is that sales growth is slowing. Compaq's (CPQ) warning on Friday was not company-specific, and is instead a reflection of two key factors that are hurting PC sales. First, corporate profits were down in 1998 on an as-reported basis. When profits fall, investment in capital equipment (such as PCs with Intel chips) usually suffers. Second, pre-Y2K PC purchases juiced sales in 1998 but are subsiding in 1999. Today's news for Intel was nothing like Compaq's, and there is no reason to expect a major pullback in the stock near term. But sluggish top-line growth throughout 1999 will mean that Intel's share price is dead in the water for months to come. The most recent Instinet trade on Intel was at 57 3/4, down from the close of 60 1/2.
Content provided by Briefing.com, a product of Charter Media.
Copyright © 1999 Charter Media, Inc. All rights reserved.
Copyright © 1999 E*TRADE Securities, Inc. All rights reserved.
Member NASD/SIPC. User Agreement. Version 1.0
regards |
