Here’s Why Chip Stock Earnings Estimates are Falling

FBR Capital’s Craig Berger started off the week of the Consumer Electronics Show by cutting estimates for several chip companies, including Atmel (NASDAQ:ATML), Broadcom (NASDAQ:BRCM), Maxim Integrated Products (NASDAQ:MXIM), Microsemi (NASDAQ:MSCC), International Rectifier (NYSE:IRF) and On Semiconductor (NASDAQ:ONNN), reasoning that “industry business dynamics have gotten slightly worse over the past couple of months.”

He notes that distributors are still clearing inventory, and the 2G cellular and networking markets having been languishing “of late.” He also admits he may have “modeled too aggressively” for this quarter’s estimates.

Berger also submits a somewhat blah appraisal of the CES this week:

“Regarding CES, clearly the show is less exciting than last year when ‘Tablet Mania’ gripped the Street, and with the sector in the throes of an up-cycle. This year’s key focus areas will include smartphone demand and design-win trends, incremental details on Windows 8 (NASDAQ:MSFT) timing and legacy support for Office and other applications, support for ARM-based (NASDAQ:ARMH) PCs among key OEMs and ODMs (and ecosystem partners), and traction for Intel’s (NASDAQ:INTC) Ultrabook efforts. We expect to hear some positive design-win commentary out of Qualcomm (NASDAQ:QCOM), Broadcom (NASDAQ:BRCM), Maxim (NASDAQ:MXIM), Atmel (NASDAQ:ATML), and others.”

Here’s how these stocks are reacting to the cut:

Atmel Corporation (NASDAQ:ATML): ATML shares recently traded at $9.33, up $0.29, or 3.21%. They have traded in a 52-week range of $7.36 to $16.80. Volume today was 4,792,996 shares versus a 3-month average volume of 8,460,710 shares. The company’s trailing P/E is 8.74, while trailing earnings are $1.07 per share.

Broadcom Corp. (NASDAQ:BRCM): BRCM shares recently traded at $30.97, up $0.83, or 2.75%. They have traded in a 52-week range of $27.59 to $47.39. Volume today was 5,738,926 shares versus a 3-month average volume of 8,303,060 shares. The company’s trailing P/E is 18.65, while trailing earnings are $1.66 per share.

Maxim Integrated Products Inc. (NASDAQ:MXIM): MXIM shares recently traded at $26.40, up $0.31, or 1.19%. They have traded in a 52-week range of $20.62 to $28.44. Volume today was 844,821 shares versus a 3-month average volume of 2,506,280 shares. The company’s trailing P/E is 15.90, while trailing earnings are $1.66 per share.

Microsemi Corp. (NASDAQ:MSCC): MSCC shares recently traded at $17.85, up $0.34, or 1.94%. They have traded in a 52-week range of $14.49 to $24.96. Volume today was 113,565 shares versus a 3-month average volume of 532,317 shares. The company’s trailing P/E is 28.33, while trailing earnings are $0.63 per share.

International Rectifier Corporation (NYSE:IRF): IRF shares recently traded at $20.82, up $0.54, or 2.66%. They have traded in a 52-week range of $17.28 to $35.26. Volume today was 163,591 shares versus a 3-month average volume of 463,783 shares. The company’s trailing P/E is 9.59, while trailing earnings are $2.17 per share.

ON Semiconductor Corp. (NASDAQ:ONNN): ONNN shares recently traded at $8.33, up $0.27, or 3.35%. They have traded in a 52-week range of $6.53 to $11.95. Volume today was 2,941,510 shares versus a 3-month average volume of 8,786,020 shares. The company’s trailing P/E is 33.06, while trailing earnings are $0.25 per share.

Microsoft Corporation (NASDAQ:MSFT): MSFT shares recently traded at $27.92, down $0.19, or 0.68%. They have traded in a 52-week range of $23.65 to $29.46. Volume today was 27,112,654 shares versus a 3-month average volume of 51,984,900 shares. The company’s trailing P/E is 10.15, while trailing earnings are $2.75 per share.

ARM Holdings plc (NASDAQ:ARMH): ARMH shares recently traded at $28.40, up $0.38, or 1.36%. They have traded in a 52-week range of $21.77 to $32.18. Volume today was 2,136,369 shares versus a 3-month average volume of 3,264,980 shares. The company’s trailing P/E is 76.34, while trailing earnings are $0.37 per share.

QUALCOMM Incorporated (NASDAQ:QCOM): QCOM shares recently traded at $55.59, down $0.57, or 1.01%. They have traded in a 52-week range of $45.98 to $59.84. Volume today was 5,660,261 shares versus a 3-month average volume of 14,194,600 shares. The company’s trailing P/E is 22.10, while trailing earnings are $2.52 per share.

Intel Corporation (NASDAQ:INTC): INTC shares recently traded at $25.40, up $0.15, or 0.59%. They have traded in a 52-week range of $19.16 to $25.78. Volume today was 14,415,935 shares versus a 3-month average volume of 55,929,000 shares. The company’s trailing P/E is 11.00, while trailing earnings are $2.31 per share.

To contact the reporter on this story: Gina Smith at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com