The Zacks Analyst Blog Highlights: NVIDIA, Texas, Apple, Intel and Advanced Micro Devices

Zacks

For Immediate Release

Chicago, IL – August 9, 2012 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include NVIDIA Corporation (NVDA), Texas (TXN), Apple (AAPL), Intel (INTC) and Advanced Micro Devices (AMD).

 

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513

Here are highlights from Wednesday’s Analyst Blog:

 

Earnings Preview: NVIDIA

 

NVIDIA Corporation (NVDA) is scheduled to announce its second quarter 2013 results on August 9, 2012. In the run up to the earnings release we noticed some movement in analysts’ estimates.

First Quarter Overview

The company reported total revenue of $924.9 million in the quarter, down 3.9% from $962.0 million in the year-ago quarter.

The Graphic Processing Unit saw revenue declining 6.7% sequentially as a result of 28 nm supply shortage, which also impacted the high-end desktop business. The Professional business dropped 4.2% sequentially, while Consumer business jumped 20.8% backed by the company’s Tegra business.

Gross margin on a GAAP basis was 50.1%, versus 51.4% in the previous quarter. Gross margin was at the top end of management’s guidance. Although the gross margin declined slightly, the company reported margin expansion in the Kepler GPUs for desktops and notebooks. On a non-GAAP basis, gross margin was 50.4%, which declined from 52.5% reported in the previous quarter.

Second Quarter Outlook

For the second quarter of fiscal 2013, revenue is expected to be in the range of $990.0 million to $1.05 billion, whereas gross margin is projected to be 51.2% (plus or minus 1 percentage point). Operating expense is expected to be $418 million.

The company also expects depreciation and amortization in the range of $55.0 million to $57.0 million and capital expenditures in the range of $35.0 million to $45.0 million. Diluted shares are expected to be roughly 628 million.

Agreement of Analysts

A look at estimate revisions in the last 30 days shows negative sentiments. Out of the 29 analysts providing estimates for the second quarter, 5 analysts revised their estimates downward over the last 30 days, while 3 moved in the opposite direction.

For fiscal 2013, 8 out of 29 analysts lowered their estimates, while only one moved in the opposite direction. For fiscal 2014, only 1 out of 29 analysts raised the estimate, while 8 analysts lowered their estimates downward over the last 30 days.

Some analysts believe that NVIDIA’s Tegra chips for smartphones and tablets are well positioned versus Texas (TXN) and others. However, a negative with respect to these fast-growing markets is that the largest vendors, Samsung and Apple (AAPL) make their own processors.

Analysts are also of the opinion that Tegra can ship units worth $500 million in 2012 as smartphone, non-Apple tablets and other volumes increase. This apart, the hype surrounding a Tegra-related platform has come down to a considerable extent.

Moreover, analysts are also of the opinion that NVIDIA faces long-term GPU attach rate risks as tech behemoths like Intel (INTC) and Advanced Micro Devices (AMD) pursue integrated architectures. Again, other analysts are also of the opinion that NVIDIA could be a major PC processor supplier if WoA is successful. Further, with growth in handheld devices, enterprise opportunities are expected to increase rapidly.

Magnitude of Estimate Revisions

The Zacks Consensus Estimates for the July and October quarters have not changed in the last 30 days. However, the Zacks Consensus Estimate for both fiscal years 2013 and 2014 dropped a couple of cents.

The Zacks Consensus Estimate for the second quarter increased by a penny to 15 cents in the past 90 days. For Fiscal 2013, it moved up by 3 cents. The Zacks Consensus Estimate for fiscal 2014 is also up 2 cents in the past 90 days to 93 cents.

Recommendation

The company delivered weak first quarter results. The expected decline in PC demand may affect the demand for NVIDIA’s graphics cards. However, growth trends in the smartphone and tablet markets are encouraging, since NVIDIA’s Tegra chips could see some resultant growth.

Moreover, the acquisition of data chip manufacturer Icera will add value to its product portfolio. The newly introduced NVIDIA PhysX technology will likely attract more gaming customers. However, NVIDIA’s performance may be tempered slightly by the weak gaming market, economic slowdown in Europe and increased competition.

Currently, NVIDIA holds a Zacks #3 Rank, implying a short-term Hold rating.

 

 

 

Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=5515.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=5517

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leon Zacks. As a PhD from MIT Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=5518.

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Follow us on Twitter: http://twitter.com/zacksresearch

Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts

Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

Media Contact
Zacks Investment Research

800-767-3771 ext. 9339

support@zacks.com

http://www.zacks.com

Read the analyst report on NVDA

Read the analyst report on TXN

Read the analyst report on AAPL

Read the analyst report on INTC

Read the analyst report on AMD

Zacks Investment Research



More From Zacks.com
View Comments (0)