Analyst Daniel Niles says although Intel's earnings per share of $0.09 and its third quarter midpoint EPS guidance of $0.13 were both below consensus, he thinks it could have been a lot worse given the environment.
Niles notes the upside surprise in average selling prices, which were up 4% quarter over quarter. He says a continued ramp of Pentium 4 (P4) chip shipments while being on allocation, as well as a shift from Celeron wafer production to P4 production, helped drive average selling prices higher.
Niles cut his $0.57 2002 EPS estimate to $0.54, and trimmed the $0.83 2003 estimate to $0.75. He says Intel's stock is fairly valued but not inexpensive, with shares trading at 25 times his 2003 EPS -- which he thinks is a "finally reasonable" figure.