Intel Shares Leap as Earnings, Revenue Surpass Targets
Intel reported earnings that outstripped forecasts Tuesday, sending the company's shares surging in late trade, even as the PC chip heavyweight struggles to find its footing with smartphones and tablets.
The world's biggest chipmaker reported earnings of 59 cents a share, compared with 43 cents a share last year.
Revenue for the most recent period came in at $12.85 billion, against $10.299 billion a year earlier.
Intel was seen posting earnings of 46 cents a share on revenue of $11.59 billion, according to a consensus estimate of analysts surveyed by Thomson Reuters.
In January, Intel disclosed a design error in one of its chipsets and subsequently cut its revenue forecasts for the quarter.
Shares of Intel leaped more than 5 percent after the bell. Get after-hour quotes for Intel here.
INTC: The stock is up sharply today on earnings data Wall Street likes. The chart below reflects today's bounce on good volume and a turn up in the MACD. Nothing in this chart looks bearish. There's no topping pattern or exhaustion in price.
IBM Raises Full-Year Profit Forecast, but Shares Flat
IBM raised its profit forecast as the tech giant released quarterly earnings ahead of Wall Street projections, citing strong sales of its mainframe computers and brisk business in emerging markets.
Some investors were disappointed that the company did not raise its full-year forecast by a wider margin.
"The concern is they didn't really guide a whole lot higher than they had originally for the year, if you take into account the earnings surprise," said Fort Pitt Capital Group senior analyst Kim Caughey Forrest. "That's a little disappointing."
IBM shares were little changed, dropping to $165.36 from their New York Stock Exchange close of $165.40.
The world's largest technology services firm managed to beat expectations for the first quarter, even though it does about 11 percent of its business in crisis-stricken Japan.
That was partially because of strong performance in the red-hot markets of Brazil, Russia, India and China, where revenue was up a combined 26 percent from a year earlier.
"These numbers show IBM's resiliency. They beat on just about every area I had hoped," said Ted Parrish, co-portfolio manager of the Henssler Equity Fund.
International Business Machines Corp raised its forecast for full-year profit, excluding items, to at least $13.15 from its previous view of at least $13.00.
IBM benefited from strong demand for the latest version of its mainframe computer, which it introduced in the third quarter of last year. Sales of that product were up 41 percent from a year earlier.
The company also reported first-quarter profit, excluding items, of $2.41 per share, ahead of the average analyst forecast of $2.30, according to Thomson Reuters I/B/E/S.
Revenue rose 8 percent from a year earlier to $24.6 billion, beating the average analyst forecast of $24.0 billion.
IBM: Big blue is trading right against a prior peak which may act as resistance near term and the stock may consolidate from here. That being said, there's nothing overly bearish in this chart pattern either. No topping pattern or price exhaustion.
INTC and IBM are two Dow Jones components, and IBM has a near 9% weighting of that index. These two companies reflect good fundamental earnings announcements with technical chart patterns that reflect nothing that is bearish.
Stock Market:
The markets have been on one of the greatest 2 year rallies of all time. And while a great deal of this rally has been a massively oversold bounce helped by Federal Reserve policy and corporate cost cutting it still might have legs to continue.
The super bearish view on stocks has been dead wrong for months. Many keep trying to call every new high as the TOP with the next part of the bear market to follow.
My Take
Long term I'm as bearish as anyone because we've done little but re-inflate via the Federal Reserve and government over spending. Shorter term the market could continue to rally.
Why?
The market has ignored every black swan event making the term almost comically useless. From Egypt to the PIIGS to the Earthquake in Japan to a potential shut down of the US government to Gaddafi. The market has shrugged those off as non events. Even the forward looking stock market is not afraid of QE2 ending! The market is shrugging off bad news, which is typically a bullish indicator.
As long as the market is focused on earnings, which have been better, then stocks fundamentally have a bid. As long as the technical charts of individual stocks do not reflect topping patterns or exhaustion, then Mr. Market is free to continue higher.
If I had to handicap a potential top of significance, it's either this summer (June maybe) or early next year. We just haven't exhausted market strength yet and that takes time.............usually!
Hope all is well.
J.D. Rosendahl, Rosey