Intel Crushes Q1 Ests.

There’s nothing new in Intel Corporation (INTC) reporting a solid quarter. But the question this time around is whether its performance will be enough to remedy some bearish sentiment in the PC market, and maybe even lift the chipmaker’s ho-hum Zacks #3 Rank (‘Hold’).

For its first quarter, INTC announced earnings per share of 59 cents, which topped the Zacks Consensus Estimate of 46 cents by almost 30%. The company has surpassed quarterly expectations stretching back more than 2 years now (and even then it managed to match).

The result was also about 37% better than last year’s result.

Revenue increased by 25% year over year to $12.9 billion. That marks a very solid improvement over the Zacks Consensus Estimate at 11.6 billion. Intel stated that this revenue was an all-time record, thanks to double-digit annual revenue growth in every major product segment and across all geographies.

Looking toward the second quarter, INTC expects non-GAAP revenue at $12.85 billion, give or take $500 million.

So how could a company putting together quarters like this only have a Zacks #3 Rank? Technically-speaking of course, the reason is that earnings estimates of late have trended lower. One of the bigger factors stems from bearishness in the PC market, which was underscored recently by news that the market shrank in the first quarter. This was especially troublesome since the Street seems to be paying more attention to things like the iPad and smartphones.

The Zacks Consensus Estimate for 2011 is now $2.03 per share, which is down 2 cents in 30 days and 10 cents in 3 months. Meanwhile, the Zacks Consensus Estimate for 2012 is $2.19 per share, which still suggests year-over-year growth of about 8%. However, the outlook is down 3 cents in 30 days and 5 cents in 3 months.

More specifically, there have been 14 downward revisions for 2011 in the past 30 days, and only 2 upward revisions. There are 44 total estimates for the period, which means that most analysts are sitting on their hands. But those that do make moves are doing so to the downside.

Same idea for 2012. There have been 10 lowered revisions and only 1 to the upside in the past month. There are 41 total for the period.

Will today’s report be enough? Well, Intel didn’t just beat expectations, it crushed them. And its outlook moving forward, which might have been the most important thing in the report, was also very encouraging. So analysts will have a lot to look over in the coming days.

That includes Zacks analysts, who will be posting more specific news on this quarter and its ramifications coming up…

In after hours trading, shares of INTC are up almost 6%.

By Jim Giaquinto

About Zacks Investment Research 1767 Articles

Zacks Investment Research is one of the most highly regarded firms in the investment industry. In 1978 Zacks originated the concept of utilizing earnings estimates revisions to make profitable investment decisions. Zacks offers multiple investment products and services to help investors achieve superior returns.


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