There are a raft of notes out this morning covering what will be a raft of chip earnings reports this week.
Network processor maker Cavium (CAVM) reports this afternoon. Atmel (ATML) reports tomorrow after the bell. Qualcomm (QCOM) reports Wednesday after the bell, as does ON Semiconductor (ONNN). Wireless chip maker Skyworks Solutions (SWKS) reports on Thursday, as do Microchip (MCHP) and International Rectifier (IRF).
Most of the notes I’ve seen are talking about a more-or-less in-line reporting season, with some top line numbers that may miss consensus.
FBR Capital’s Craig Berger this morning writes that Atmel’s Q4 view will likely miss the consensus $487 million in revenue and 20 cents a share in EPS, but that it will probably be better than many fear, with “robust” shipments of its “maXTouch” products. He thinks the company will report lower average selling prices and lower margins and offer a “conservative” view on 2012, though there’s a prospect for unit upside on chipset shipments as a result of its involvement in Apple’s (AAPL) iPhone 4S.
Berger also sees ON Semi’s Q4 view being “less bad than feared.” Overall, Berger thinks ” a year-end semiconductor rally is likely.”
Berger rates Atmel and Qualcomm and ON Outperform.
Sterne Agee’s Vijay Rakesh, meanwhile, expects Qualcomm to just about meet consensus for Q3, at $3.95 billion and 80 cents, versus the consensus $3.99 billion and 78 cents. The “key,” he thinks, is the 2012 outlook, with perhaps $17.3 billion and $3.62 forecast, about in line with consensus. The company has “solid” traction with Apple and with the newly introduced Nokia (NOK) devices based on Microsoft’s (MSFT) Windows Phone 7, but there’s some risk from an inventory adjustment at Samsung Electronics (SSNLF).
Skyworks’s fiscal Q4 report will probably meet consensus, roughly, at $400.6 million and 53 cents a share, though that top line number is slightly below the average $400.8 million estimate. The company is gaining traction at Nokia, but iPhone shipments were down somewhat in calendar Q3.
“While the presence of 1 PA and a SiGe filter in the new iPhone 4S reveal that SWKS has not been completely replaced in the updated handset, content is down to ~$1.40-1.50, versus ~$3 content in the iPhone 4 with 3PAs. Also, we believe RFMD and AVGO have seen some solid design wins at Samsung and HTC, which could be a headwind,” writes Rakesh.
Rakesh rates Qualcomm a Buy and Skyworks, Neutral.
Susquehanna Financial Group’s Chris Caso, meantime, reiterates a “Positive” view on Qualcomm, although he writes that “tepid” unit growth at smartphone “licensees” in Q3 sets up for a weak Q4 view relative to estimates:
The Street has been worried about 3Q handset units (which affect 4Q QTL [Qualcomm Technology Licensing] revenue) since AAPL printed underwhelming units earlier this month. We expect a strong ramp for iPhone in 4Q, which has positive implications for QTL revenue in 1Q. We also had a weak report from LG, flat smartphone growth at NOK, and weakness at RIMM. Offsetting this were strong results from Samsung, where smartphone units were up over 40% Q/Q, and solid results from Sony Ericsson and HTC. All total, we estimate the top nine suppliers grew smartphone shipments by ~7% Q/ Q in 3Q. Our estimates currently reflect 11% Q/Q unit growth for QCOM’s FY4Q, so based on these reports, QCOM’s 4Q QTL guidance is likely to come in light.
Shares of the chip makers are mostly lower this mornin! g:
QCOM is down $1.13, or 2%, at $52.10; ONNN is off 18 cents, or 2%, at $7.64; MCHP is down 33 cents, or 0.9%, at $36.13; SWKS is off 37 cents, or 1.8%, at $19.92; ATML is down 36 cents, or 3%, at $10.79; CAVM is down 61 cents, or 1.8%, at $33.42; and IRF is
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