Rosenblatt Gets Cautious On Texas Instruments, Intel Ahead Of Earnings

Rosenblatt views on the earnings for next week:

Texas Instruments Inc TXN (Buy; PT: 230) will report results on April 26. Rosenblatt saw a slight beat and raise limited by continued supply chain constraints. 

Rosenblatt saw the 1Q22 sales coming in above its consensus estimates of a low-single-digit sequential decline and EPS coming above its consensus estimate buoyed by strength in Industrial and Automotive and TXN continuing to spend to keep up with demand. 

For the June guide, Rosenblatt saw sales above its consensus estimates on Analog and Embedded and continued strength in Automotive and Industrial.

The critical issues for investors include the aggressive 300mm fab build-out of two new fabs in the next two years and an additional four through the early 2030s to meet an expected doubling in analog industry sales growth. 

Intel Corp INTC (Sell; PT: $40) will report on April 28, where it saw a more mixed quarter and outlook due to the 14-week 1Q dynamic that will make it difficult to hit the flat-to-up sales growth for 2Q22 suggested by consensus.

Rosenblatt saw 1Q22 coming roughly in line with its consensus estimates driven by weak consumer PC and an improving commercial PC environment. 

For June, Rosenblatt saw a below-consensus view on the extra week in 1Q22 and continued data center that a muddled Sapphire Rapids launch should solidly offset.

The flattish 2022-year guide (and 2023 sales growth target) and gross margins continue to be wildcards given the various data center dynamics that include Sapphire Rapids delays, Granite Rapids delay into 2024, the "Investment Phase" that Intel is going through, and ASPs and process node yields.

Price Action: INTC shares traded lower by 1.53% at $46.77 on the last check Friday. TXN shares traded lower by 1.59% at $174.41.

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