Earnings season kicks off next week with Texas Instruments Inc TXN (Buy, Price Target: $230) on July 26.
Rosenblatt analyst Hans Mosesmann expected an inline 2Q and inline 3Q guide as it recovered from the China Covid-19 shutdowns.
On July 28, Intel Corp INTC (Sell, PT $40) looked to report where Mosesmann expected them to meet 2Q but lower the $76 billion current year outlook due to inflationary pressures in PC, shares losses in CPUs, and delayed volume ramp of Sapphire Rapids.
He saw 2Q22 sales coming in line with his/consensus estimates, with the quarter impacted by ~$500 million due to shutdowns. For September, he expected sales around his/consensus estimate with sequential growth aided by China issues becoming less of a headwind and strong automotive trends.
Mosesmann expects the industrial end market as more mixed in macro-related inflationary dynamics. He sees the 2Q22 sales and non-GAAP EPS coming in line with his/consensus estimates.
Mosesmann recalled that 2Q22 was impacted by China shutdowns, Russia, and an extra week in 1Q22. For 3Q22, he was more comfortable with his below-consensus view on continued share losses (mainly commercial PC and data center) and inflationary pressures, particularly in the consumer PC market.
The inflationary-related issues will likely bring down the current 2022 sales guide, but he also suspected share losses.
The emerging consensus view that Intel is raising prices broadly in 2H22/2023 may create an additional headwind for sales but will aid in keeping gross margins in the targeted low-50s% level.
The timing of the data center CPU Sapphire Rapids volume ramp will be critical for him, which started sampling earlier this year. He saw this product likely pushed out to 1H23 in terms of actual volume and, as such likely to give Advanced Micro Devices, Inc AMD more momentum.
Price Action: TXN shares traded lower by 0.95% at $162.34 on the last check Monday.
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