Rash of Intel, AMD warnings issued by analysts
A crush of warnings are descending on Intel, AMD, and the PC industry this week.
First up, Avian Securities. The brokerage company said that PC makers "are being very conservative with their build plans for Q4."
Market researcher IDC is equally pessimistic. "The supply chain is telling us that there is strong concern for demand decline," according to Shane Rau, an analyst at IDC. He is cutting his processor forecast "probably into the low to mid single digits on a unit basis for total PC processor growth in the year 2009."
Investment bank Friedman Billings Ramsey (FBR) cut estimates for AMD and Intel on Tuesday. Like other analysts, FBR's Craig Berger cited signs of weakness for both notebook and motherboard manufacturers in Taiwan.
For Intel, FBR's fourth-quarter pro-forma earning per share (EPS) estimate falls to 30 cents, from the previous estimate of 36 cents. The fourth-quarter revenue forecast is cut to $9.8 billion from $10.4 billion
For AMD, FBR now sees a fourth-quarter pro-forma loss of 24 cents, worse than a previous estimate of 19 cents.
Barclays Capital chimed in too. The investment bank sees 2009 processor units up only 2 percent, down from a previous estimate of 5 percent.
Other Wall Street firms such as Piper Jaffray and ThinkEquity are citing weakness. ThinkEquity has a sell rating on Intel due to significant weakness in corporate notebook demand and a steep reduction in notebook orders from Dell and Acer.
Avian Securities spoke to why demand is off. "PC OEMs...are worried about having too much inventories if end-market demand comes in materially weaker than expectations this holiday season."
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