Intel Guidance Wrecks Last Bullish Hopes for Tech/PC’s (INTC, AMD, MSFT, DELL)

Intel Corp. (NASDAQ: INTC) has just posted earnings.  The processor and chip giant noted its EPS as $0.38 on revenues of $10.71 Billion.  First Call had this quarter at $0.40 EPS on revenues of roughly $10.84 Billion, but the initial notes indicated that there was a 2.5 Cent charge on EPS or $234 million for restructuring and asset impairments.  Gross margin for this last quarter was 58.1%.
As far as guidance it is offering the following:

• Intel is guiding next quarter to $9.4 to $10.0 Billion, but next quarter estimates are $9.97 Billion in revenues;
• Intel guides margins to 56% +/- 1%;
• Intel puts its fiscal 2008 margin at 57% +/- a few points, puts R&D at $5.9 Billion; puts MG&A at $5.5 Billion and Cap-ex at $5.2 Billion +/- $200M.  Intel didn’t offer revenue or earnings guidance but the estimates are $1.51 EPS on roughly $41.7+ Billion.

Here was today’s earnings preview and here was Jim Cramer on CNBC’s MAD MONEY last night saying he liked it here after the sell-off.  We’ll see if this chart can recover from its woes in the near-term.  Last week AmTech said "We are a buyer of INTC, here and now."

Intel shares closed down 1.7% at $22.69 in normal trading on roughly 95 million shares on an unofficial count before the after-hours reaction.  Shares are now down 13% more at $19.60 in the post-earnings trades in after-hours.  Its 52-week trading range is $18.75 to $27.99, and most recently $22.00 acted as the last real support level after its slide during the first part of January.

Shares of Advanced Micro Devices (NYSE: AMD) are also feeling the pinch.  Those shares fell some 4.5% today to $6.12 and shares are down over 5% to $5.75 in after-hours.  Microsoft (NASDAQ: MSFT) shares are down over 3% in after-hours trading and Dell (NASDAQ: DELL) shares are down almost 6% in after-hours.  This will likely fall over into other tech stocks as well.  As noted, so much for the efficient market theory.   If Silicon Valley home prices didn’t play catch up with the rest of the major price drops seen in California, there’s a better they will now.

Jon C. Ogg
January 15, 2008