Advanced Micro Devices Inc. and Intel Corp. are expected to report fourth-quarter results this week that will likely top their recently increased guidance as holiday sales of personal computers were not as grim as most had expected, analysts said.
The two, longtime rivals in microprocessors that are the brains of personal computers, raised their quarterly guidance on Dec. 6, with Intel, the world's biggest chipmaker, noting that it was having difficulty shipping enough Pentium 4 chips to customers amid stronger-than-expected demand.
The fourth quarter, paced by holiday sales, is typically the industry's strongest. Revenues in the first quarter usually decline slightly on a sequential basis, although some analysts are forecasting Intel's revenues to be flat to slightly up in the current quarter.
"We suspect Intel's order book supports sequentially flat, or even slightly up revenues" in the first quarter, wrote Salomon Smith Barney analyst Jonathan Joseph in a note. "Strong demand for the P4 continues, and though there were signs that supply was coming in line with demand just before Christmas, we have heard that order lead times at some larger (PC makers) have moved out several days in the past week."
Joseph raised his fourth-quarter earnings-per-share estimate on Jan. 4 to 12 cents from 10 cents and his revenue forecast to $6.98 billion from $6.8 billion, citing higher shipments of processors and slightly improved average selling prices. Joseph now estimates that Intel received an average $158 per processor compared with an earlier estimate of $155.
News source: Reuters - Holiday Lift Seen for Intel, AMD Results