It's official: The semiconductor industry is recovering
faster than the Wall Street analyst herd thought possible.
Last night,
Intel (Nasdaq: INTC) shocked the Street with
stellar earnings.
Of course,
if you've been paying attention, you already knew Intel
would beat expectations.
Intel's sales jumped 17% quarter over quarter, to $9.4
billion, and the second quarter's $0.07 GAAP loss per share
turned into earnings of $0.33 per share. That healthy
bottom-line haul is not far off from the $0.35 per share seen
in 2008 -- before the infamous Market Meltdown. The 8% annual
sales slide was far smaller than the 16% revenue drop we
should see across all semiconductor makers this quarter.
Management says that the surprisingly strong quarter rides
on lots of consumer demand, while enterprise spending remains
on the down-low. The enterprise shoe should drop in 2010 or
2011 as corporate IT budgets normalize and corporations work
through their pre-installation testing procedures on the
upcoming
Microsoft (Nasdaq: MSFT) Windows 7 platform.
All things considered, CEO Paul Otellini explained that this
quarter's performance was the result of "having the right
products at the right cost at the right time for a recovering
global economy."
He also noted that Intel has been taking back lost market
share from
Advanced Micro Devices (NYSE: AMD) in 2009,
and that he thinks the trend is ongoing. Nevertheless,
investors have taken Intel's strength as a sign of more
general sector strength, and shares of both AMD and
netbook-market competitor
ARM Holdings (Nasdaq: ARMH) jumped right
along with Intel today.
If Intel truly did steal share from the competition,
its competitors' gains could be
short-lived.If you're itching to buy AMD today, you might
want to wait until Friday, in case the Thursday night report
doesn't measure up to Intel's lofty performance. Only then
will we know whether Intel's surprise was a sectorwide
phenomenon or Intel's personal power. Whenever Intel is doing
well, you could anticipate the good news to trickle down to
end-user product pushers like
Dell (Nasdaq: DELL) and
Apple (Nasdaq: AAPL), though.
This article was originally published as
Intel Shocks on Scheduleon
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