Intel earnings point to possible recovery
Intel this afternoon gave investors a reason to hoist a beer mug or two, posting $8 billion in second-quarter revenue powered by sales of its Atom processor, used in fast-selling netbook computers, lightweight laptops that sell for as little as $200.
Intel Chief Executive Paul Otellini said the results "reflect improving conditions in the PC market segment with our strongest first- to second-quarter growth since 1988 and a clear expectation for a seasonally stronger second half."
Translation: Computer makers are expecting a surge of back-to-school shoppers and better holiday sales than in 2008, when consumers reined in nearly all discretionary spending.
The Santa Clara, Calif., chip maker, however, posted a $398-million quarterly net loss, or 7 cents a share, primarily because it paid a record $1.45-billion fine imposed by the European Commission on charges that the company restricted competition in the semiconductor market. It had a $1.6-billion net profit in the second quarter last year. Its $8 billion in revenue represented a 12% improvement over $7.1 billion in sales posted for the first quarter of this year but an erosion from $9.5 billion a year earlier.
Even so, Wall Street loved what it heard, pushing Intel's stock up $1.20, more than 7%, to $18.03 in after-hours trading following the earnings release. The stock earlier in the day had closed up 34 cents to $16.83.
Intel's results kick off the earnings season for the tech sector, with Google coming up Thursday and Apple and Yahoo next Tuesday, followed by EBay, Microsoft and Broadcom later in the week.
-- Alex Pham