Intel Corporation (INTC) did what it had to do by reporting a positive EPS surprise and record revenue for its third quarter.
Now in and of itself, this really isn’t that big a deal; INTC is one of those companies that are expected to surpass expectations each time out. However, taken into context with the overall macro environment, this becomes a very reassuring report, especially after IBM (IBM) surprisingly missed revenue expectations the other day.
With most of the market fearing another recession at worst or a disappointing growth trend at best moving forward, the third-quarter earnings season takes on a new importance. A good quarter, which is expected by most of the Street, would go a long way in easing fears that this economic recovery will soon peter out. INTC did its part today in that regard.
INTC reported GAAP earnings per share of 65 cents (non-GAAP at 69 cents), which easily beat the Zacks Consensus Estimate of 61 cents. This marks the 11th straight quarter with a positive surprise.
Revenue surpassed $14 billion, which surged nearly 30% year over year while beating the Zacks Consensus Estimate of $13.84 billion, thanks largely to double-digit unit growth for notebook PCs and continued strength in the data center. Given these factors and the new records for microprocessor units shipped, the market may be able to take a breather from worrying too much about a lackluster PC market.
As for the fourth quarter, Intel is expecting about $14.7 billion, plus or minus $500 million, which is also above the Zacks Consensus Estimate of $14.2 billion. Meanwhile, INTC’s board decided to increase its buyback authorization by $10 billion.
This report may be just what Intel needed to break through a rather dreary scenario on the earnings estimates front. The momentum over the past several weeks has actually been slightly to the downside. The semiconductor giant is currently a Zacks #3 Rank (Hold).
There will be a lot of study on this report in the coming hours, so please be on the lookout for a more in-depth look at the quarter here at Zacks.com.
As of this writing, Intel shares are moving up in after hours by more than 5.5%.
