Semiconductor giant Intel Corp. (NASDAQ: INTC) reports fourth-quarter results after Thursday’s bell, and the question is whether its earnings and its outlook can keep this week’s rally going. Intel is expected to report 52 cents a share in earnings for the fourth quarter, up 8.3 percent from a year ago. Revenue of $13.7 billion would be up 1.8 percent from last year.

The shares were up nearly 5 percent on the week on Wednesday, in part because JPMorgan analyst Christopher Danely upgraded the stock to outperform from neutral. Danely’s upgrade was based on reports from Intel, Hewlett-Packard Co. (NYSE:HPQ), Microsoft Corp. (NASDAQ: MSFT) and others that personal computer demand may be improving.

At the same time, Danely said new CEO Brian Krzanich appears ready to offer “more realistic” guidance and focus on areas where Intel has a clear advantage.

The shares were at $26.84 Wednesday afternoon, up 32 cents or 1.2 percent. They hit a 52-week high of $26.91 earlier on Wednesday.

Intel’s guidance on revenue and gross profit for the first quarter and 2014 will be a key component of its earnings report. The company has said — and analysts expect — flat revenue this year. Analysts currently expect 42 cents a share in first-quarter earnings, down from 46 cents a year ago. Revenue is expected to rise 1.6 percent to $12.8 billion. The gross profit margin should hold around 62 percent.

Intel has seen its growth stall in the emergence of the smart phone and tablet revolution. Its chips are geared toward personal computers and servers, and it has struggled to come up with products for mobile devices that can compete on performance and price with chips based on designs by ARM Holdings PLC (NASDAQ: ARMH), the British tech company.

Intel generates more 60 percent of its revenue from its personal-computer group. Revenue through the third quarter for the group was down 5.6 percent from a year earlier to $24.5 billion. Operating profit declined 17.6 percent to $8.4 billion as average selling prices declined.

The concern about this business is big enough that Intel has held off finishing a $5 billion chip factory in Chandler, Ariz., near Phoenix. The fabrication facility was to produce Intel’s most advanced chips.

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.