Intel Quarter a Bellwether for Tech Stocks

By Jessica Davis  |  Print this article Print

Processor maker Intel may just post better-than-expected revenues April 14 when it announces its earnings results for Q1. Analyst reports and stock prices indicate optimism around Intel's results. That's good news because Intel, which makes the building blocks used to manufacture servers, PCs, blades, storage and other computer hardware, is seen as a bellwether for the performance of the rest of the technology market.

Intel (NASDAQ:INTC) may just post better-than-expected revenues April 14 when the processor maker announces its earnings results for the first quarter. Whatever the results, they will be closely watched as a bellwether for other technology companies and for the state of technology spending and demand.

That’s because Intel’s first-quarter earnings will be the first in a new round of earnings reports from technology companies. Plus, Intel’s processors are one of the building blocks used by many manufacturers that make PCs, servers and storage devices. That means Intel feels the movement of the economy before other technology manufacturers do. And a positive report could mean that more good news is on the way.

The performance of Intel stock over the last month certainly indicates that investors may be looking for some good news from the company. Intel shares were trading at around $16 on April 13, just ahead of market close, compared with $14.25 on March 16, a month earlier.

And analysts are predicting better-than-expected performance. A pre-earnings report from FBR Research says that the research firm’s PC supply chain checks have shown improving bookings, likely due to better-than-expected PC shipments for the first quarter, reduced chip inventory levels, the benefits of the China stimulus package and the beginning of a thaw in corporate demand.

"We think [Intel] will post upside to Q1 estimates and will guide Q2 revenues flattish to slightly higher sequentially," FBR Research says in its brief report.  

FBR Research is raising its estimate for Intel’s first-quarter revenue to $7.15 billion, which is down 13 percent quarter-over-quarter and a few points better than Intel’s guidance of $7 billion, the research firm says.

"Consistent with many chip firms, Intel has seen orders ramp over the past month," FBR Research says in the report.

FBR Research predicts Intel will guide revenues to between $7 billion and $7.6 billion in the second quarter.

Jessica Davis covers the channel for eWeek and Channel Insider. Her technology journalism career began well before anyone heard of the World Wide Web and has included stints at Infoworld, Electronic News/EDN, and the Philadelphia Business Journal. Her work has also appeared on CNN and Forbes.com. She has covered hardware, software and networking, as well as the business side of technology. She has won several journalism awards, including a national ASBPE award for best staff-written column, and was named Marketing Computers hardest working tech journalist on their inaugural list of top tech journalists. Jessica can be reached at jessica.davis@ziffdavisenterprise.com