IBM & Intel Pay The Earnings Piper (INTC, IBM)

Today was a potential D-Day for earnings reports in the tech sector with two key DJIA targets reporting earnings.  Intel Corporation (NASDAQ: INTC) and International Business Machines Corporation (NYSE: IBM) are both giving back some fresh gains after their earnings after investors were demanding more.

Intel Corporation (NASDAQ: INTC) reported earnings of $0.56 EPS on $12.91 billion in revenues.  Thomson Reuters had estimates of $0.50 EPS and $12.84 billion in sales.  Next quarter’s guidance was put at $13.6 billion, plus or minus $500 million and  Thomson Reuters sees $0.55 and $13.43 billion in sales.   The gross margin came in 64% for the first quarter and the company sees margin at 62% plus or minus a couple of points for the coming quarter.  All investors need to know is that Intel hit a new multi-year high today and they will understand that this would have had to have been a beat-big quarter and a guide much higher in guidance to keep the bulls happy.

International Business Machines Corporation (NYSE: IBM) reported earnings of $2.78 EPS and $24.7 billion in sales; Thomson Reuters had estimates of $2.65 EPS and $24.77 billion in sales.  For the quarter ahead, IBM’s guidance for all of 2012 is being revised to at least $15.00 from a prior target of $14.85 EPS.  Thomson Reuters was already up at $14.93 for the year.  IBM’s estimated services backlog at March 31 was $139 billion, down 2% year over year or up 1% adjusting for currency.  This backlog was actually $141 billion just at the end of 2011.

Intel had already hit a multi-year high today ahead of earnings and IB was within about 2% of its all-time high.  Neither report should be considered bad by any real measurement of expectations.  The problem is that these are not going to keep propelling the shares without some extra oomph coming from the market.

Intel closed up $0.06 at $28.47 today with a new high of $28.78 for the year and shares are down 3.1% at $27.58 in the after-hours.

IBM shares closed up $4.73 at $207.45 on the day against an all-time and yearly high of $210.69 and  shares are down by about 2.2% at $202.88 in the after-hours session.

JON C. OGG