Earnings War: Intel Versus AMD.. Q1 2008 (INTC, AMD, NVDA)

This week, we will have the real start of the earnings onslaught for Q1-2008 earnings season.  We compiled many estimates Friday evening to see which pairs of companies and which actual leaders were coming out with earnings.  A real caveat we’d make right now is that the screw up on earnings from everyones favorite conglomerate last Friday there are going to be major analyst downward revisions in many sectors this week right ahead of the actual reports.

On Tuesday afternoon, we’ll get to see earnings out of Intel Corp. (NASDAQ: INTC). The estimates for the processor and chip giant from First Call are $0.25 EPS on $9.63 billion in revenues.  Next quarter estimates are $0.28 EPS on $9.25 billion in revenues. Estimates for fiscal Dec-2008 are $1.29 EPS on $39.8 billion in revenues.

We’d notes that Intel’s lowered guidance from recent weeks was noted mostly on its flash memory operations.  Analysts have an average price target north of $26.00.  Intel Corp.’s 52-week trading range is $18.05 to $27.99.

Advanced Micro Devices (NYSE: AMD) is also set to report earnings this week, with the number two processor company giving up its numbers on Thursday after the close.  First and foremost, AMD did warn even more recently than Intel and it announced roughly a 10% workforce cut.

First Call estimates from AMD are -$0.51 EPS on revenues of $1.5 Billion, although those estimates have come down steadily from analysts.  For the next quarter, analysts are looking for -$0.46 EPS also on $1.5 Billion in revenues.  For Fiscal-2008, it is expected to see -$1.36 EPS on $6.43 Billion, and now analysts expect wide losses in 2009 as well at -$0.64 on $7.07 Billion in revenues.

AMD’s 52-week trading range is $5.31 to $16.19, and there’s probably no point in mentioning the old $30.00+ highs before that.  The average analyst price target is $almost $8.40 on AMD.  Analysts may hope to look at ATI as being its bright spot, and one that may have a jump on NVIDIA (NASDAQ: NVDA) in graphics chipsets for 2008, and it might even be worth considering that old analysis showing the possibilities of an NVIDIA-AMD tie-up that AmTech outlined as a possibility. Lastly, it wasn’t exactly all that well regarded that AMD lost its Chief Technology Officer. Can you say turmoil?

Recently, there was talk of Intel is going to be able to launch more core-processors than its troubled rival.
Intel was recently noted as having some of its China ventures that could see IPO’s.  Intel did recently hike its dividends.

Jon C. Ogg
April 13, 2008

Jon Ogg produces the Special Situation Investing Newsletter.  He can be reached at [email protected] and he does not own securities in the companies he covers.