Intel Keeps The Momentum Rolling (INTC, AMD, SMH)

Intel Corporation (NASDAQ: INTC) just reported earnings for the first quarter of 2009.  Expectations were high with the hope of a beat and raise quarter.  The near-monopoly in the world of processors reported earnings of $0.43 EPS on $10.3 billion in revenues. Thomson Reuters consensus estimates were $0.38 EPS on $9.83 billion in revenues, although some estimates were $0.40 and even $0.41 EPS and some expected revenue above $10 billion.  Advanced Micro Devices Inc. (NYSE: AMD) and Semiconductor HOLDRs (NYSE: SMH) might as well have reported along with Intel.  AMD is moving with Intel and the Semiconductor HOLDRs despite it being on deck for earnings tomorrow.

Intel managed to show solid gross margin of 64%, which was above an unofficial estimate of close to 62% from our count.  That compares to last quarter’s record of 65% in gross margins.

Intel’s guidance is $10.2 billion, plus or minus $400 million, in revenues; and margins are expected to be 64% plus or minus a couple of points.  This estimate is versus Thomson Reuters estimates of $0.36 EPS and $9.69 billion in revenues, so even the lowest point of the new range is above the consensus.

Intel is trying to offer some 2010 guidance.  Gross margins is expected to be 64%, plus or minus a couple percentage points versus a prior target of 61% plus/minus up to 3 points.  It sees taxes being about 31% for the second, third and fourth quarters.

With shares up just over 1% at $22.77 and a high of $22.82 today, that was a new 52-week high above the trading range of $14.96 to $22.75.  The stock is trading up almost 4% at $23.60 in the after-hours session on very active trading.

Advanced Micro Devices Inc. (NYSE: AMD) is up for earnings tomorrow as Intel’s only quasi-rival.  Thomson Reuters estimates are -$0.10 EPS and $1.53 billion in revenue; next quarter estimates are -$0.09 EPS on $1.52 billion in revenue.  Estimates for 2010 are -$0.17 EPS and it is expected to earn $0.15 EPS on $6.89 billion in revenues for 2011.  After closing up 1.5% at $9.56 today, this is at the higher-end of its 52-week trading range of $3.17 to $10.04.  AMD is trading up 2% at $9.74 in the after-hours session.

The key ADR via the Semiconductor HOLDRs (NYSE: SMH) closed up 0.7% at $28.96 after hitting a new 52-week high today and the 52-week trading range is $28.61 to $29.02.  Its shares are indicated up around $29.50 in the after-hours session.

JON C. OGG