Instant view: Intel forecasts solid Q4 sales, margin

LOS ANGELES (BestGrowthStock) – Intel Corp forecast a slightly stronger than expected fourth-quarter revenue and gross margin as demand from corporations and emerging markets hold up, buoying its shares in after-hours trade.

Commentary:

BOBBY BURLESON, ANALYST, CANACCORD GENUITY

“The headline looks pretty good. There was concern about Q4… and the number is better than the Street expected.

“The question really is, what’s the mix of business, and the margin’s good, which seems to hint at better mix, and maybe a little more business on the data center and server side.

“Intel has set a high bar for tech earnings.

“When they talk about healthy inventory levels, other companies aren’t necessarily going to be able to say the same thing. Other companies might be talking about more weakness, others might have to offer guidance below what people are expecting for Q4.

“Intel is seeing a benefit in their average selling price, so there’s something happening positively in terms of their product mix. They are also managing costs quite well.”

ADAM BENJAMIN, ANALYST, JEFFERIES & CO

“It’s kind of a little bit better than what people are expecting. There’s not anything dramatic with the numbers. Nothing wildly exciting to the upside or downside.

“I’m not sure (what) it indicates as a barometer of the economy or the holiday season. They don’t have a good sense of the holiday because it hasn’t started. Obviously their business isn’t getting worse but it’s hard to argue that the business is getting better here.”

DOUG FREEDMAN, ANALYST, GLEACHER & CO.

“The outlook is slightly less than seasonal, so expectations for lower consumer spending are being built in to the numbers. No surprise there. Lowered expectations are being met, and I would say concerns over pricing do not seem to be having the expected impact on margins or ASPs.”

CHRIS CASO, ANALYST, SUSQUEHANNA FINANCIAL GROUP

“It looks fairly well in line with consensus, a little upside. The revenue guidance for the December quarter is about in line with the street, or a little better.

“The gross margin number, up sequentially and 67 percent for Q4, is a topic the market’s going to focus on. That’s better than expected.

“I certainly think, at first glance, what we see is a little better than what we had modeled.”

PATRICK WANG, ANALYST, WEDBUSH SECURITIES

“It looks like management seems relatively constructive regarding year-end demand. They talked about healthy worldwide demand for PC products. The guided revenue is in line with expectations but took gross margins up a bit.

“It seems like they’re seeing healthy tailwinds, whether it’s product mix or cost structure taking margins higher. It’s the first read on holiday and fourth-quarter demand and it’s a relatively positive view on the market. We’re going to see now how the holiday period plays out.”

(Reporting by Liana Baker and Ritsuko Ando in New York, Gabriel Madway in San Francisco)

Instant view: Intel forecasts solid Q4 sales, margin