Right after the close, Intel (INTC) reported very strong numbers. Revenues totaled $8 billion, far above expectations for $7.18 billion. Non-GAAP EPS totaled 18 cents, 11 cents above the consensus.

Q3 revenue guidance was also far above the average forecast.

The numbers reinforce my view that a recovery in the chip sector has started. Both Micron (MU) and National Semiconductor (NSM) previously topped expectations and Texas Instruments (TXN) raised its second-quarter guidance. Yesterday, chip equipment maker Novellus (NVLS) said it was seeing a “rebound in orders”.

These reports follow what have been notable increases in earnings estimates for several companies in Electronic Computer-Semiconductor. Though the year-over-year comparisons won’t be good, the second-quarter results for other chipmakers should show that a recovery is in process.

Shares of INTC are soaring in after-hours trading. If the upbeat guidance translates into further positive earnings estimate revisions – and they should – INTC could get the buying pressure necessary to break out of its current range.

Disclosure: Charles Rotblut holds iShares Semiconductors (IGW) in Zacks ETF Trader and personally owns the ETF.

 

Read the full analyst report on “INTC”
Read the full analyst report on “TXN”
Read the full analyst report on “NSM”
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