Intel Earnings Preview – First Quarter 2010

Intel [[INTC]] will be the second Dow stock to report their first quarter earnings season next week. The semiconductor stock is scheduled to report their first quarter 2010 results after the market closes on Tuesday, April 13.


Last quarter, Intel delivered solid fourth quarter results that exceeded Wall Street’s estimates on both the top and bottom lines. However, Intel’s stock declined over 3% following the earnings release and continued sliding into early February.


We are anticipating another strong quarterly performance as various industry sources are pointing to increased demand. Intel also has the benefit of extremely favorable comp’s this quarter, as the first quarter of 2009 was the low point in the recession (at least in terms of quarterly revenues).


In 2009, Intel’s revenue’s declined nearly 7% as the company weathered the downturn in the economy. Despite the sales declines, Intel’s stock gained over 39% last year. That strong stock performance has carried over into 2010, with Intel’s shares up over 9% since the beginning of the year..


On January 14, Intel provided first quarter revenue guidance of $9.30 – $10.10 billion. The current Wall Street consensus estimates are slightly above the midpoint of Intel’s guidance range, with revenues of $9.81 billion and EPS of $.38. We at are forecasting slightly better results, with first quarter revenue of $9.92 billion and $.39 EPS.


Intel is now trading at 12x consensus 2011 EPS estimates. This is below the relative valuations of their peer group. Intel remains one of our favorite Dow stocks given their strong balance sheet and favorable outlook as they continue to distance themselves from competitors like Advanced Micro Devices [[AMD]]. 


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