Intel Gives All-Clear Sign Ahead, Of A Sort (INTC, MU, AMD, SMH)

Intel Corporation (NASDAQ: INTC) has just reported its Q3-2010 earnings and given an outlook for what lies ahead for the tech sector.  The processor and chip giant had already warned at the end  of August and shares are higher than they had been at the time of the warning.  We also wanted to hear more about what we heard last week from Micron Technology Inc. (NASDAQ: MU) that PC sales were being cannibalized with smaller devices.

Intel’s  earnings were $0.52 EPS and $11.1 billion in revenues, and margins came in at 66% of revenues.  Thomson Reuters has estimates of $0.50 EPS and $10.99 billion in revenues.

As far as guidance, Intel offered guidance of and $11.4 billion plus or minus $400 million in revenues, implying a range of $11 to $11.8 billion in revenues.  Next quarter estimates are $0.50 EPS and $11.33 billion in revenues.  Intel also sees 67% (plus minus a couple points) for gross margins.

The takeaway here is that Intel had already lowered the bar enough for itself that it could beat expectations and it had tempered expectations enough for the key Q4 period.

The unofficial closing bell was up 1.1% at $19.78 on 82 million shares at the 4PM closing bell  and 52-week trading range is $17.60 to $24.37.  When it warned shares were at $18.37. Intel shares were initially up almost 2% at $20.15 in the after-hours reaction., but the stock is up almost 1% now around $19.95.

We are seeing a reaction elsewhere in the after-hours session  as the Semiconductor HOLDRS (NYSE: SMH) closed at $28.67 and is trading up around $28.90 and Advanced Micro Devices, Inc. (NYSE: AMD) is trading up 1.3% at $7.40 in the after-hours session.  Micron shares closed up 1% at $7.75 and the stock is up a couple pennies in the after-hours session.

JON C.  OGG