Intel (NASDAQ: INTC) got technology earnings season off to a rousing start late today.
After the market close, the chip giant blew the doors off Wall Street estimates for the third quarter — and promised an even bigger blow-out for the fourth quarter.
Intel’s third-quarter sales of $9.4 billion were down more than $800 million from the year-ago quarter, but that was $400 million better than the Thomson Reuters forecast, and $200 million better than the company’s most optimistic target from the guidance it gave in August. Intel’s earnings of 33 cents a share were a nickel better than expected.
For the fourth quarter, Intel said it expects sales of $10.1 billion, plus or minus $400 million — a wide range, but one that compares favorably to the $9.5 billion Wall Street forecast. The company’s gross margins were also better than expected.
The biggest question in the days and weeks ahead will be whether Intel is benefiting from inventory restocking or a genuine resurgence in demand. Intel CFO Stacy Smith said that “healthy back to school sales and inventory stocking in anticipation of a seasonally up fourth quarter led sales higher,” but that enterprise sales remain a weak spot.
Intel shares were up 5 percent in after-hours trading on the news.
The big news during the day was Cisco’s (NASDAQ: CSCO) acquisition of Starent (NASDAQ: STAR) for $2.9 billion.
STEC (NASDAQ: STEC) fell 8 percent in a move Stifel Nicolaus analyst Aaron Rakers attributed to a Marvell (NASDAQ: MRVL) flash product with Sun (NASDAQ: JAVA).
On Thursday, the earnings parade will continue with reports from AMD (NYSE: AMD), Google (NASDAQ: GOOG) and IBM (NYSE: IBM).
The Nasdaq was up a fraction to 2139, the S&P 500 lost 3 to 1073, and the Dow slipped 14 to 9871. Volume rose to 4.32 billion shares on the NYSE, and 2.08 billion on the Nasdaq. Decliners led by a 21-16 margin on the NYSE, and 14-12 on the Nasdaq. Upside volume was 46 percent on the NYSE, and 58 percent on the Nasdaq. New highs-new lows were 209-42 on the NYSE, and 103-14 on the Nasdaq.
