SAN JOSE, Calif. Faced with excess inventories and slow notebook PC sales, Intel Corp. is expected to be at the lower end of its previous guidance for the third quarter of 2004, according to a report from SG Cowen Securities Corp. on Tuesday (Aug. 31).
Intel is expected to release its mid-quarter update on Thursday (Sept. 2). In July, the company projected that its third quarter revenues would be between $8.6 billion and $9.2 billion.
At the time, Intel posted second quarter revenue of $8.05 billion, approximately flat sequentially and up 18 percent year-over-year. Second-quarter net income was $1.8 billion, flat sequentially and up 96 percent year-over-year. Earnings per share were 27 cents, up 4 percent sequentially and up 93 percent from 14 cents in the second quarter of 2003.
Looking ahead, New York-based SG Cowen projected that Intel will earn $0.29 a share on sales of $8.592 billion, up 7 percent from the previous quarter. "We believe the consensus estimates for Q3 could be trimmed following a potentially disappointing mid-quarter update," according to the report.
"We expect Intel to lower the midpoint of it revenue range and possibly lower its gross margin guidance," according to the report. "Our view is based on recent channel checks that suggests demand for notebook PCs remains tepid and that Intel is aggressively reducing prices to reduce excess inventories."