By Gary Cassady
Intel (NYSE: INTC) shares are currently trading a fraction lower ahead of its Q4 earnings release after the closing bell. The street is expecting for an EPS range between $0.47-$0.56 and a consensus of $0.53 on almost $11.4 billion of expected revenue. Intel reported EPS of $0.40 vs. the Street's $0.30 on $10.4 billion.
What are some things to consider before diving into shares of Intel? It is widely known that electronic spending was up this past holiday season when many tech companies do a chunk of their sales. Though one thing to consider is what were the hot products this season? iPads, Kindles, and many cellular products were hot this season, though Intel wasn't a beneficiary of that success. Citi came out with a note this morning stating that Macbook sales were stronger than expected after the revamping of the Macbook Air. Intel is the manufacturer of the processors in Apple Computers (desktops & laptops).
On the call, Investors should be on the look out for margins as costs continue to rise. The sector tends to be cyclical, which could be topping out as we enter into secular growth right now, says one Miller Tabak analyst to CNBC. Intel is known for being aggressive with its guidance so there is the chance that we can expect a smaller number. The dollar should not be too relevant to Intel's business model due to the global demand.
As tablet demand rises, look for Intel's formal entry into the market. Intel's share price has had a decent run up over the past 2 years, says the Miller Tabak analyst. While it may be true, share prices have been lackluster since the summer. Should Intel surprise us with another beat and raise, look for share prices to head higher.
Note: this quarter last year was the same case; shares rose on the news, though fell back in trading the following day.
Intel is trading lower at $21.26
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.