Monthly Archives: July 2010

Intel raises 2010 margins and CAPEX

Intel is still widely viewed as a bellwether for the tech sector and the overall market. Intel’s earnings report and forward-looking guidance looks upbeat and positive. Will this report push the broader market higher and take the major indices into positive territory for the year? Based on Intel’s earnings report it sure doesn’t reflect a struggling global economy.

Second quarter earnings of $0.51 per share, which is 8 cents better than consensus estimates of $0.43. Revenues rose 34.6% year- over- year to $10.8 billion vs the $10.25 billion consensus estimates. Gross margins of 67% vs the 64.0% consensus estimates. Intel sees higher third quarter revenues of $11.2-12.0 billion vs. $10.92 billion. Intel raises fiscal year 2010 capital spending in the range of $5.0 billion to $5.4 billion. “Strong demand from corporate customers for our most advanced microprocessors helped Intel achieve the best quarter in the company’s 42-year history. Our process technology lead, plus compelling architectural designs increasingly differentiate Intel-based products in the marketplace. The PC and server segments are healthy and the demand for leading-edge technology will continue to increase for the foreseeable future.”

Intel CFO Stacy J. Smith cites strength across servers, notebooks, netbooks, and desktops that led to the outstanding results. The CFO said it had the lowest ever platform unit costs. Enterprise was an area of particular strength for Intel in the second quarter. Mr. Smith expects third quarter revenue growth to be robust due to strong demand.

Most tech stocks are trading higher after hours and futures are pointing up. It could be another great day for the longs tomorrow. Does it mean it’s time to load up and stockpile technology companies? We shall wait and see.

Happy Birthday America!

Happy 4th of July!!  It doesn’t get any better than hot dogs, fireworks and hamburgers.