Intel Corp. (INTC), the world’s largest chipmaker, easily outperformed earnings estimates in its 2nd quarter of 2010, reported after the bell but preceding the company’s conference call scheduled for 5:30pm ET. Intel posted earnings of 51 cents per share, beating the Zacks Consensus Estimate of 43 cents in what the company is calling its “best quarter ever.”
With revenues of $10.8 billion in the quarter and a gross margin of 67%, Intel (and its shareholders) have sufficient reason to crow about the results. Even though both analysts and traders of INTC stock had been very cautious leading up to the earnings announcement, its 2nd quarter numbers are impressive any way you look at them. Intel’s EPS is 18.6% higher than the 43 cents per share it reported in the first quarter, and 183% higher than its 2nd quarter 2009 posting of 18 cents per share. Over the past 4 quarters, Intel has averaged a positive earnings surprise of 18%.
And this follows Intel’s May investor meeting, after which estimates for the quarter and fiscal 2010 were ratcheted up 16.2% and 10.7%, respectively. The Zacks Consensus Estimate for fiscal 2010 is currently at $1.87, but we might expect a few upward revisions in the near term, especially as Intel expects a full-year gross margin at 66%, nearly at the impressive 2nd quarter levels.
Intel has been carrying a Zacks #3 Rank (Hold) rating and a Neutral recommendation, based largely on very few estimate revisions over the past 30-60 days and no noticeable change in consensus estimates over that time period. Taking into account Intel’s strong performance and depending on how analysts view its forward outlook, we may expect some near-term upward momentum in estimate revisions.
Our in-depth analysis of Intel’s 2nd quarter 2010 numbers will be published before the opening bell on Wednesday.
Read the full analyst report on “INTC”
Zacks Investment Research
