Intel stays positive on Q3
Intel tightened the range of its third quarter revenue forecast on Thursday, pushing toward the high side of previous predictions.
The chipmaker expects revenue to fall between $7.6 billion and $7.8 billion for the period ending Sept. 27, according to a statement. Last last month, Intel made the uncharacteristic move of providing guidance ahead of today's planned mid-quarter update. At the time, Intel predicted revenue between $7.3 billion and $7.8 billion.
Intel is clearly optimistic about its PC and server processor businesses for the quarter. It likely provided guidance ahead of the mid-quarter update to reflect a steady stream of sales.
A number of analysts have upped their PC sales forecasts after seeing a slight upswing in the market. IDC, for example, is looking for PC sales to rise 8.4 percent year-on-year as opposed to its previous prediction of a 6.3 percent hike. It points to strong notebook and corporate sales as reason for the move.
Merrill Lynch also issued a recent note upping its PC shipment forecasts. The analyst firm was calling for 5 percent growth this year and 10 percent in 2004 but now says there will be a 7 percent hike this year and a 11 percent hike in 2004.
"Intel is seeing broad-based strength, motherboard numbers have been revised up, distributor Computacenter made positive comments, and our CRN Survey found improving SMB demand," Merrill said.
It, however, countered predictions of a corporate buying recovery.
"Large corporate demand . . . remains tepid with budgets in place," Merrill said. "Replacement demand is bound to pick up with the average PC over 4 years old and new technologies such as WiFi driving notebooks."
Intel is not seeing the same momentum from its communications business, which includes flash memory. The company said demand there remains soft.
Intel shares, along with a number of tech stocks, have benefitted from the recent bull run on the market. Since July, Intel's stock has risen from $20 per share to a close today of $28.60 - just below its 52-week high. ®