The wind blowing on Wall St. is perverse and racked with fear. Traders will turn vicious in the face of reasonable results. They will not even spare their own financial health.
By any reasonable measurement, Intel (INTC) turned in fine numbers for the fourth quarter. Operating income moved up 105% to $3 billion on $10.7 billion in revenue. Perhaps more important, gross margin rose 8.5 points to 58%, a sign that price wars with AMD (AMD) are not cutting into the company’s results any longer.
Intel is predicting that gross margins will stay around 57% this year and that in the first quarter could produce revenue as high as $10 billion. Investors thought those numbers were too "light".
Intel’s business in the America’s did not grow much, but results in Asia, Europe, and Japan were strong.
While it is convenient to argue that Intel should have done better, it is easier to argue that it might have done worse. If there is indeed a slowdown in global tech spending, it did not show up in Intel’s results and was hardly hinted at in its forecasts.
Intel traded down as much as 14% on its quarter. That would put it near a 52-week low. This is a company that dominates its industry, has a tremendous balance sheet, and an operating income improvement of 105%.
What company in its right mind would not want to trade places with Intel?
Douglas A. McIntyre
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