Earnings Guidance & Outlook To Dominate Intel Earnings (INTC, AMD, SMH)

Intel Corporation (NASDAQ: INTC) is just about to be the second DJIA component to report its third quarter earnings for this earnings season.  We have already gotten a warning from the chip and processor giant about a lower growth target in late-August.  Thomson Reuters has estimates of $0.50 EPS and $10.99 billion in revenues; Next quarter estimates are $0.50 EPS and $11.33 billion in revenues.

The move into smartphones and many of the notebooks, tablet-PCs and iPad purchases over traditional PC’s is a trend that is working against Intel. The notion of “good enough computing” has also  been a drag.  With the McAfee purchase,  Intel hopes to integrate security into a deeper layer.

While Intel will have an indirect impact on many major technology stocks, Advanced Micro Devices Inc. (NYSE: AMD) is the direct competitor and it is worth noting that the Semiconductor HOLDRS (NYSE: SMH) has over 20% of its weighting tied up in Intel.

At $19.63 in afternoon trading ahead of earnings its 52-week trading range is $17.60 to $24.37.  When it warned shares were at $18.37, so the numbers have been good enough and many felt that Intel lowered the bar far enough that it could beat earnings ahead.

As with all earnings, the guidance into the fourth quarter and beyond is what investors will care most about.  The slowdown was already known in the summer, and now the question for each of the new tech and index giants will boil down to how they are managing currencies, overseas economic turmoil, and the domestic market.

JON C. OGG