Salomon Smith Barney cut estimates on Intel (INTC).
Analyst Jon Joseph says several channel inputs suggest Intel's average processor contract price may be running slightly lower than he anticipated, largely due to a product mix favoring lower priced processors. He notes there are several factors that could boost application service providers in the next six weeks, like heavy back-end loading in Q3, an aggressive Pentium 4/845 chip push, and a channel fill for Microsoft's Windows XP launch.
Even so, Joseph cut the price assumptions from $157 to about $150, and cut the Q3 unit estimate from 28 million units to about 27 million units. He also cut the $6.64 billion Q3 revenue estimate to $6.24 billon, trimmed the Q3 $0.11 EPS to $0.08, cut the $0.54 2001 EPS to $0.47, and lowered the $0.75 2002 estimate to $0.70. Joseph maintains his buy rating and $40 target.