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Don't Overreact to Intel's Earnings Results

NEW YORK ( TheStreet) -- Getting the Street to see the bright side of Intel (INTC), which will report its third-quarter earnings results on Tuesday, has been a difficult task.

As one of the lone supporters, hoping this company will see better days ahead, I can say its slow progression out of the dying PC environment has been frustrating watch. However, I don't believe it serves investors' interest to focus solely on the company's near-terms results.

I'm not dismissing the fact that Intel has dropped the ball on the mobile devices market, but there's also a point when the company's recent struggles against the likes of Qualcomm (QCOM - Get Report) and ARM Holdings (ARMH) have been beaten to death. At the risk of sounding like an Intel apologist, I believe the company's mobile advancements -- as modest as they may appear -- are steps in the right direction.
[Read: <a target="blank" data-add-tracking="true" href="http://www.thestreet.com/story/12066501/1/why-im-sticking-by-dow-55000.html"><em>Why I'm Sticking By Dow 55,000</em></a>]

To that end, it's time that investors cease their obsession with the company's quarter-to-quarter performance and adjust their expectations as Intel begins to think differently.

On Tuesday, the Street will be looking for Intel to post a profit of 54 cents per share on revenue of $13.47 billion. While earnings are expected to decline year over year by 7 cents per share, revenue is expected to come in essentially flat.

The good news, though -- and perhaps a sign of optimism -- is the Street's profit estimates have climbed up by 3 cents over the past three months. As I've said, I wouldn't put too much weight on what Intel reports on Tuesday, at least not to the extent it blinds the operational progress the company is making in other areas.

For instance, amid a highly competitive environment, Intel still possesses some distinct operational advantages over rivals such as NVIDIA (NVDA) and Advanced Micro Devices (AMD). The company's world-class technological and manufacturing capabilities serve as one example.

Also, while it's easy to discount Intel on the basis of the company's consecutive quarters of revenue declines -- including a 5% drop in the July quarter -- investors miss the fact that the company is still meeting expectations on margins, which have grown for the past several quarters. Intel's management expects more margin expansion this current quarter.
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