Analysts just can't agree on Intel Corp. (Nasdaq: INTC) as the company preps its earnings report. Shares ran in place Tuesday as Merrill Lynch and Prudential upgraded the stock, but BancBoston Robertson Stephens cut its earnings estimates.
Shares in the Santa Clara Calif.-based semiconductor giant were up 2 1/8 or 3.35 percent to 65 5/8 in morning trading.
The analyst ratings come on news that Intel completed the offer for shares of Dialogic Corp. (Nasdaq: DLGC) and expects to buy Dialogic's remaining shares, according to a Tuesday press release. Intel expects to complete the $780 million acquisition of Dialogic by about July 8.
Analysts have been tweaking Intel estimates ahead of the chipmaker's earnings. Last month, Morgan Stanley Dean Witter downgraded Intel.
First Call estimates from a pool of 31 analysts still set year-end earnings at 2.32 a share, and expect second quarter earnings to be 53 cents a share.
Merril Lynch upgraded the stock from "accumulate" to "buy," citing "lagging stock price performance relative to the semiconductor sector," in a report that also set an intermediate-term price objective at $86.
Intel is coping effectively with declining prices in the desktop segment of its microprocessor business," that counteract "earlier concerns about weakening unit demand in the PC industry," the report adds.
Prudential Securities also said Tuesday it was raising its rating to a "strong buy" from "accumulate."
But BancBoston Robertson Stephens cut Intel's 1999 expected earnings to $2.19 from $2.25 a share, an lowered second quarter estimate to 52 cents a share from 53 cents a share, citing less-than-expected unit volume in the first quarter and other factors. It also lowered its fiscal year 2000 estimate to $2.40 from $2.55 a share.
BancBoston Robertson Stephens predicted that second quarter revenue will be around $6.75 billion, and third quarter revenue will be flat to slightly up with "flatish" gross margin.
Following Intel's first quarter earnings report, officials were cautious about the second quarter outlook.