Intel's 3Q: Watching For Clues To The Holidays

JORDAN ROBERTSON

SAN FRANCISCO (AP) ⿿ Intel Corp. is scheduled to report its third-quarter financial results on Tuesday, Oct. 12, after the market closes.

WHAT TO WATCH FOR: The personal computer industry, of which Intel is a major part, has already copped to a crummy back-to-school shopping season.

Intel, the world's biggest maker of the "brains" of PCs, cut its third-quarter guidance in August. Advanced Micro Devices Inc., the No. 2 to Intel in that market, recently did the same. And two leading PC makers ⿿ Hewlett-Packard Co. and Dell Inc. ⿿ also raised red flags.

Consumers clamped down on spending on new PCs this summer amid worries about prolonged joblessness and other economic anxieties.

Now, investors' focus will be on the next critical shopping season: the holidays. If Intel's guidance is strong, it could be a balm for many of those fears, showing Wall Street that Intel's customers ⿿ PC makers ⿿ are anticipating a bump in demand. Signs of shakiness would likely depress expectations for a strong finish this year in PCs.

WHY IT MATTERS: Because of Intel's unique position, it's seen as a proxy for the overall PC market. Its own profitability often isn't as important for the market as what its guidance says about the health of PC sales.

Intel can prosper even when PC sales are skidding ⿿ it invests billions of dollars in cutting-edge factories because new technologies let Intel shrink the size of the transistors on its chips. That cuts the cost of making the chips, which helps Intel's profit margins while boosting the chips' performance and giving consumers faster PCs.

Transistors are the tiny on/off switches that control the flow of electrical current.

Intel's microprocessors are inside 80 percent of the world's PCs.

WHAT'S EXPECTED: Intel is expected to have earned 50 cents per share on $11.0 billion in revenue, according to a poll by Thomson Reuters. In August, Intel warned that its revenue would be between $10.8 billion and $11.2 billion, down from its earlier forecast of $11.2 billion to $12 billion.

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