Wall Street sees Q1 EPS 80c, revenue $18.31B

Intel (INTC) is scheduled to report results of its first fiscal quarter after the market close on April 28, with a conference call scheduled for 5:00 pm ET. What to watch for:

1. GUIDANCE: Along with its last report, Intel guided for Q1 earnings per share of 80c on revenue of roughly $18.3B. At the time, analysts were expecting the company to report EPS of 86c on revenue of $17.62B, but those figures have since changed to 80c and $18.31B, respectively. Several weeks after reporting the results, Intel also provided an outlook for fiscal 2022, guiding for FY22 EPS of $3.50 on revenue of $76B. Analysts currently expect Intel to report FY22 EPS of $3.50 on revenue of $75.78B.

2. LYNX: Earlier this week, Lynx analsyt KC Rajkumar said he heard anecdotally that major manufacturing campuses in China are running down 30%-50% from normal capacity due to labor and component shortages resulting from the unpredictable shutting down of industrial and residential hubs in cities there. The analyst, who sent a warning a month ago with regards to unexpected risks to the first half, now thinks the supply risks extends into Q3. For Intel (INTC), Rajkumar thinks the downside to estimates should be less due to muted expectations, but argues that the Street is "not prepared for lower sales volume resulting in a miss to gross margins."

3. CITI: March notebook shipments were up 33% month-over-month, below Citi's expectation of up 42%, Citi analyst Christopher Danely told investors in a research note earlier this month. The analyst said that= Q1 notebook shipments were down 20% quarter-over-quarter, below Citi's expectation of down 18%, due to continued component supply tightness, logistic constraints and slowdown in Chromebook demand. March was the third consecutive month where notebook shipments were below expectations, writes Danely. He views this as "another yellow flag" and believes PC sales could "cool off" in the second half of 2022 due to a reversion to the mean after two straight years of double digit growth. Danely reiterated a Neutral rating on Intel with a $55 price target.

4. TRUIST: Earlier in April, Truist analyst William Stein lowered the firm's price target on Intel to $49 from $53 and kept a Hold rating on the shares as part of a broader research note on Semiconductors. The analyst cited "hard evidence" of a sudden negative shift in demand signals from a wide range of compute, consumer, and communications OEMs, driving his recent of 2023 models to contemplate negative growth and lower earnings multiples for the industry. Stein added that while it is "challenging" to justify any downgrades, his conviction on Semis is now lower.