Wall St slashes Intel Q1s
Gasp for ASP
Right now, it's not so wonderful being Intel: falling PC demand in the US, and maybe in Europe too; rising OEM inventories; AMD giving it a run for its money, the new weakness in flash products, and networking equipment customers who are not in the best of health to buy the company's comms chip products.
Nothing secret here: on March 8, Intel issued a sales and profits warning (Story: 5000 jobs to be axed at Intel as slowdown hits). Now the analysts have put in their two pennies-worth.
Analysts polled by First/Call Thomson Financial forecasts that Intel will earn 15 cents a share in Q1, down from 36 cents a share in the same Q last year. The consensus is that sales will fall to $6.491bn, a whopping $1.5bn down on last year's $7.993bn, financial newswire AFX reports.
First Call (or maybe AFX) has assembled the views of some analysts, the most interesting of which are those of Lehman Brothers' Dan Niles. Dan is an average selling price (ASP) man - he reckons that Intel's ASPs and margins are falling, as the company's product mix is "skewed more toward desktops versus portable and servers than originally anticipated".
Niles also forecasts "dramatic cuts" for Pentium 4 ASPs (join the crowd) to hit back against AMD and to stoke demand ahead of America's back to school selling season. And he'll be "surprised" if Intel doesn't cut capital spending this year by US$1bn. ®