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Intel's earnings should be enough to keep the technology rally rolling
10/13/2009 11:21 pm EST
That set the stock soaring by almost 7% in after-hours trading. The entire chip sector moved up on the news.
The technology-heavy NASDAQ Composite Index is up 36% in 2009, outstripping the performance of the Standard & Poor's 500 and the Dow Jones Industrial Average by two to one. This news should keep that out performance going.
Two other technology bellwethers Google (GOOG) and IBM (IBM) report on October 15. Texas Instruments (TXN) reports on October 19 and Microsoft (MSFT) on October 23.
Intel actually went so far as to contradict the consensus view that the personal computer industry wouldn't grow in 2009.
Industry watcher Gartner has predicted another year of declining sales for 2009 as a whole. But Intel CEO Paul Otellini said that, led by Asian customers, sales may actually inch ahead for the year.
As good as the news was, earnings and revenue were still down from the third quarter of 2008. Earnings of 33 cents a share were down from 35 cents a share a year earlier. Revenue was down 8.1% from the third quarter of 2008.
In the fourth quarter, the company said, gross margins will increase to around 62%, plus of minus three percentage points.
The top of that range would be the highest gross margins for Intel this decade. The previous peak was 63.9% in the fourth quarter of 2000 achieved in the year that the technology boom turned to bust.
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