Earnings Preview: Intel

Intel (INTC) is expected to report Q1 earnings Tuesday with a conference call scheduled for 5:30 pm EST. The consensus estimate is 25c for EPS and $9.63B for revenue, according to First Call.

Guidance

Back on March 4, Intel lowered its gross margin guidance for the quarter to 54% from 56%, citing tumbling NAND prices and a glut of memory chips on the market. Expectations have already come down for Q1 results, and most believe it's already baked into the stock. That seems to be leading many analysts to expect good things from the company when it reports at the close today.

Analyst Views

Many analysts believe that rival Advanced Micro Devices' (AMD) woes were as a result of Intel taking more market share. Intel also said that PC and mobile demand remained strong, which had seemed to have been over-shadowed by the lower gross margin guidance. Those categories represent that vast majority of Intel revenue. There is a whisper number of 28c, or 3c better than Wall Street expectations. Some analysts are betting that if Intel can beat, and base it on stronger than anticipated margins, the stock could see a break-out reaction.

On April 10, Bank of America upgraded Intel to Buy from Neutral on renewed confidence in the company's ability to exceed consensus gross margin forecasts, a coming second leg of share gains versus AMD, and more meaningful benefit to EPS from share buybacks. Key issues on the conference call: guidance, comments on Intel's competitive position, and possibly an update on the timing to release a new set of mobile chips.