Intel Corp. (Nasdaq: INTC) is seeing good times ahead -- analysts upped their earnings estimates for the chipmaker Monday as it announced it will almost double its semiconductor chip manufacturing capacity in Ireland.
Analyst Ashok Kumar for U.S. Bancorp Piper Jaffray, who has a "strong-buy, aggressive" rating on the stock, upped estimates for the June quarter from $7.9 billion and 70 cents a share to $8.15 billion and 73 cents a share. His current earnings estimate is 2 cents above First Call Corp.'s consensus estimates. Kumar has also revised revenue estimated on the second half from $17.7 billion to $18.5 billion, but maintained his prior earnings estimate.
"The stock has successfully tested the lows of April and has been under accumulation while bottoming. With the seasonal strength in second half, we expect the stock to outperform the broad averages," Kumar stated in a report.
Analyst Dan Niles at Lehman Bros. also increased his 2000 and 2001 EPS estimates on Intel, noting that the company can now produce up to 15 percent more processors in the third and fourth quarters, and that PC demand has noticeably increased in early June. He reiterated his "buy" rating and $175 price target, saying Intel is one of the two best ways to play the PC market.
Shares in the company were up 4 7/16 to 130 1/2; with worldwide demand surging and chipmakers ramping up production, Intel and other chipmakers expect to be riding high through the second half of the year.
In other news, Intel said it is boosting its capacity in Ireland. Intel's $2 billion investment, which is one of the biggest investments in Ireland, will add 1,000 jobs at Intel's European manufacturing site at Leixlip, west of Dublin, which currently employs 4,400.
Craig Barrett, Intel chief executive, said the additional capacity would help the company maintain its leadership in the semiconductor market.
The new factory will initially manufacture on 200-mm silicon wafers and move on to the next generation of manufacturing technology on 300mm wafers, Intel said.