RealTime IT News

Intel Delivers

Intel beat earnings and revenue estimates after the close on Tuesday, easing investors' jitters after AMD plunged 26% on a warning during the day.

Intel's earnings of 33 cents a share beat estimates by 2 cents, and revenues rose 9.8% to $9.6 billion, ahead of $9.41 billion forecasts.

Intel said it expects first-quarter revenues of $8.8-$9.4 billion, compared to $8.94 billion estimates, and the chip giant said it sees gross margins rebounding to 58% this year, despite expected first-quarter margins of only 55%. Intel also reduced inventories by almost $600 million, or 18%.

"We ended 2004 with record revenues and robust demand for Intel architecture products across all geographies and channels," stated CEO Craig Barrett. "Our investments in manufacturing capacity, innovative new products and global presence have allowed us to post double-digit gains in both revenue and profits two years in a row. In 2005, we look forward to continued growth as we ramp our 65nm process technology and introduce our first dual-core microprocessors across a range of new platforms."

Intel also boosted its capital spending from $3.8 billion in 2004 to $4.9-$5.3 billion in 2005, which sent chip equipment stocks higher after hours.

The news was good enough to send Intel from a loss of 1.5% on the day to a gain of 1.5% after hours.

Also after the close, Microsoft announced that CFO John Connors is leaving to join a venture capital firm.

Stocks tumbled during the day after AMD warned and Alcoa missed estimates.

The Nasdaq fell 17 to 2079, the S&P 500 lost 7 to 1182, and the Dow dropped 64 to 10,556. Volume was unchanged at 1.49 billion shares on the NYSE, and rose to 2.26 billion on the Nasdaq. Decliners led 21-12 on the NYSE, and 21-9 on the Nasdaq. Downside volume was 75% on the NYSE, and 77% on the Nasdaq. New highs-new lows were 52-19 on the NYSE, and 48-37 on the Nasdaq.

AMD plunged 26% during the day after the company warned that earnings and revenues will come in well below estimates due to weak memory sales.

HP lost 3.6% on a Morgan Stanley downgrade, and Unisys fell 6% on a warning.

Nortel rose 4% after the company finally restated its results for 2001-2003.

Apple fell 6% on its Macworld announcements and iPod sales that weren't everything investors had hoped for. The company reports earnings Wednesday night.

QLogic gained 8% after raising guidance.