Intel Calling For Seasonal Strength (INTC, SMH)

Intel Corporation (NASDAQ: INTC) posted earnings, and the chip and processor giant made $0.18  in non-GAAP EPS and $8.02 billion in revenues.  Thomson Reuters estimates of $0.08 EPS on $7.27 billion in revenues.  Gross margins were also ahead of plan at 50.8%.  This is even having an impact in the Semiconductor HOLDRs (NYSE: SMH) since Intel has a 23% weighting in that ETF.

Intel has been a bit muted on how much guidance it likes to give, but it projected revenue of $8.5 billion, plus or minus $400 million.  It put gross margins at 53%, plus or minus 2%.  The consensus estimates for the Q3 period ahead are $0.16 EPS and $7.79 billion in revenue.  To keep a perspective on how wide the forward multiples are, the EPS target for 2009 is $0.56 EPS and the estimate for 2010 is $0.90 EPS.

After the charges from the EU case, Intel still would have been in-line.  This quarter reflects improving conditions in the PC market segment “with our strongest first- to second-quarter growth since 1988 and a clear expectation for a seasonally stronger second half…”

Shares closed up 2% at $16.83 on an unofficial closing basis in regular trading today, and the shares are halted after-hours session has shares  after the earnings report.

The Semiconductor HOLDRs (NYSE: SMH) closed up 1.7% at $21.81 on an unofficial closing price, and the after-hours reaction has shares trading at $22.50.

UPDATE AT 4:36 PM EST… INTC shares are trading right around $18.00 after closing at $16.83.

JON C. OGG
JULY 14, 2009