SAN FRANCISCORecent checks into first quarter PC builds have revealed modestly better conditions than were present last month, a Wall Street analyst said Wednesday (Feb. 18).
FBR Capital Markets analyst Craig Berger is now forecasting first quarter PC builds to be down 20 percent from the fourth quarter of 2008, an improvement from his forecast last month of a 27 percent decline.
But Berger cautioned his audience not to "get overly positive on this data point until better PC pull-through is confirmed by other sources."
Berger said in a research note that contacts at the top five notebook makers now expect first quarter notebook unit builds be down 26 percent from the fourth quarter of 2008, better than Berger's forecast last month of a 33 percent decline.
Sources at the top four desktop motherboard makers now expect desktop PC builds to be down 12 percent from the fourth quarter of 2008, better than Berger's forecast last month of an 18 percent dip, according to the analyst.
Berger said FBR is leaving its forecast for No. 1 chip vendor Intel Corp. unchanged based on the new projections. He said Intel's own internal revenue guidance, calling for first quarter revenue to be down 15 percent from the fourth quarter of 2008, appears safe.
According to Berger's analysis, PC build volumes are falling by 31 percent from peak shipments in the third quarter of 2008 to trough shipments this quarter.
Intel's guidance would amount to a revenue decline of the same 31 percent over that period, he said.
"Thus, we feel that Intel's 1Q revenue guidance encapsulates enough bad news," Berger wrote.
FBR maintains an $11 share price target for Intel and a rating of "market perform," equivalent to "hold."
Intel's stock traded at $13.59 in midday Nasdaq trading Wednesday.