Intel CEO Calls A Market Bottom

Posted by Kris | Wednesday, April 15, 2009 | | 2 comments »

As usual, Intel shares tend to rise up on the days leading to the quarter earnings only to get beaten down after the earnings have been released. This "phenomenon" even happened a couple of time during the bull market of 2006-2007. Seems to be a high probability trade to me to just go LONG just a few days before the announcement. With no clear-cut competitor, Intel is strong enough to weather the storm. 

In early trading, investors pushed down Intel (INTC:15.32-0.69-4.3%4.2% to $15.34.
While posting better-than-expected first-quarter earnings, Chief Executive Paul Otellini added a bold pronouncement that that the slump in the personal computer market has reached its bottom.
But the Santa Clara-Calif.-based tech giant's decision not to offer a detailed outlook disappointed investors, and puzzled some analysts.
"Despite better-than expected results and management comment to the effect that it believes the PC market bottomed in the first quarter, it looks like that bottom is lower than we expected," analyst Brian Piccioni of BMO Capital Markets wrote in a research note downgrading Intel shares to market perform from outperform.
Calling Intel "a stock to own for the recovery," he added, "We see no signs an economic recovery has taken hold."
After U.S. markets closed Tuesday, Intel posted first-quarter net income of $647 million, or 11 cents a share, compared with a profit of $1.4 billion, or 25 cents a share, for the year-earlier period.
Revenue was $7.1 billion, down from $9.7 billion a year ago. Analysts had expected Intel to report earnings of 3 cents a share on revenue of $7 billion, according to a consensus survey by Thomson Reuters.
For the second quarter, the company said it is not providing a detailed revenue outlook, but that it is "planning for revenue approximately flat to the first quarter." Intel also projected gross margins in the mid-40s.
Analysts currently expect the company to report earnings of 7 cents a share, on revenue of $7 billion, according to a survey by Thomson Reuters


2 comments

  1. Mt. // 11:44 AM  

    cpu is not exactly sun rise industry, as long as intel doesn't shift to telco in a huge way, it has no apparent bright future but just in sustaining mode.

    I said that in 2000 and it hasn't exactly evolved since then ...

  2. Kris // 9:05 PM  

    It cannot be denied that the fact that Intel has a monopolistic business in the CPU world. There are not much worthy competitors out there.

    The Atom processor family line will give Intel a portal to the lucrative low cost & mobile gadget segment which were nearly untouched a few years back.

    Intel is a slow but powerful giant. Thus, need more time to reach from point A to B :P