SAN FRANCISCO—Intel Corp. is in danger of missing the midpoint of its first quarter sales target range due to multiple signs of weak PC demand from the PC supply chain, according to a Wall Street analyst.
Christopher Danely, an analyst with JP Morgan, said in a report circulated Friday (March 11) that aggregate February notebook ODM shipments declined roughly 20 percent from January, significantly greater than the seasonally typical 1 percent decline between those months. As a result, notebook ODMs lowered aggregate first quarter unit guidance from down 8 percent from the fourth quarter of 2010 to down 12 percent, compared to a normal seasonal decline of 10 percent, Danely said.
"Our checks indicate PC demand in China remains weak and PC demand in mature markets continues to stagnate due to weak consumer PC demand and share loss to tablets," Danely said.
Even with the addition of revenue from the recently acquired McAfee and the former Infineon wireless chip unit, Danely said JP Morgan believes that Intel is at risk of missing the consensus analyst revenue estimate and mid-point of its own guidance, $11.7 billion. Danely's first quarter estimate for Intel's revenue is $11.3 billion, the low end of the company's guided range.
Danely said JP Morgan analysts believe that Intel needs to lower its capacity utilization rates, as its days of inventory days increased roughly 11 days quarter-to-quarter from 83 days in the third quarter of 2010 to 94 days in the fourth quarter of 2010, the second-highest level in 15 years. Danely said the analysts believe that Intel is too optimistic in assuming that its new second-generation Core processors will drive higher PC demand. According to Danely, Intel projects that PC unit sales will grow 13 to 15 percent in 2011 without including media tablets.
According to JP Morgan IT hardware analyst Mark Moskowitz, secular headwinds such as the expected deceleration in commercial PC growth and the elongation of the useful lives of PCs are also weighing on PC demand, Danely reported. Last month the JP Morgan IT hardware team lowered first quarter PC revenue estimates for Hewlett-Packard Co., Dell Inc. and Acer Inc.—which combined represent roughly 44 percent of all PC demand—along with reducing its PC sales forecast for 2011.
On Thursday, market research firm IHS iSuppli reported that its estimates projected that PC sales hit a record 93.1 million units in the fourth quarter of 2010, blowing past the previous high of 88.9 million units set in the fourth quarter of 2009.
This article is C -
"Christopher Danely, an analyst with JP Morgan, said in a report circulated Friday (March 11) that aggregate February notebook ODM shipments declined roughly 20 percent from January, significantly greater than the seasonally typical 1 percent decline between those months."
I heard this from J.P.M. since January - over and over again (published by Barron's) and now AGAIN here
Do I see a correlation regarding the date - "a report circulated..." LOL - that sounds impressive - he just copied Digitimes - LOL
Of course I can not expect from him to mention that Acer for example is expecting "a substantial sequential rise in March revenues" - not even to mention Intel's misstep in regards to chip set - obviously this must have an (temporary) impact
His "research" is based on Digitimes
Acer February revenues down 16% on-month
Yen-Shyang Hwang, Taipei; Jessie Shen, DIGITIMES [Friday 11 March 2011]
Acer has reported non-consolidated revenues of NT$28.05 billion (US$951 million) for February 2011, down 15.9% sequentially and hitting the lowest monthly level since July 2010.
Revenues for the first two months of 2011 were NT$61.42 billion, showing a 35.6% decline from a year earlier.
Acer's major contract partner, Compal, also saw revenues drop in February 2011 compared to the prior month and the same period in 2010.
Acer began shipping new models to its channel clients at the end of February, according to market observers. The notebook vendor is expected to post a substantial sequential rise in March revenues, said the observers, adding that its contract partners will also benefit.
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