) to its Focus list, and reiterates its buy rating.
Analyst David Wu says second quarter was in line with estimates; he notes megabit production was off 30% quarter over quarter, but that shipments were off only 10% quarter over quarter due to finished goods inventory cuts. He says the key to the third quarter outlook is dynamic random access memory (DRAM) demand; the good news is that, due to continued richness from DRAM content for consumer desktop and notebooks as well as recent strength from commercial PC original equipment manufacturers for low end servers, the outlook is for demand to rise 10% quarter over quarter.
Wu raised his $1.15 billion third quarter revenue estimate to $1.3 billion, and upped the $1.32 billion Q4 estimate to $1.65 billion to reflect better DRAM pricing. He also upped the $0.11 third quarter EPS to $0.16, and raised his fourth quarter $0.19 estimate to $0.39.