Salomon SB Reduces Intel Estimates

Analyst Jonathan Joseph thinks product mix issues could continue to hurt the chip giant

Salomon Smith Barney cut its estimates and price target on shares of Intel (INTC ).

Analyst Jonathan Joseph says he's encouraged by signs that Taiwanese motherboard shipments are picking up and DRAM prices are firming. He believes this could signal the beginning of a modest seasonal upturn in personal computer components. But even so, says Joseph, some of the product mix issues that hurt Intel in Q2 could carry into Q3, resulting in lower revenues and gross margins than he anticipated. The analyst expects Intel to come close to his $0.11 Q2 EPS estimate on $6.3 billion in revenues, with gross margins a likely weak spot. He lowered his $0.60 2002 EPS estimate. to $0.55 and his $1.00 2003 forecast to $0.90. He cut his $45 price target to $27.

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