The Night Watch: Intel Spreads Good Cheer to the After-Hours

Intel (INTC) is on the upside, as good news from the microprocessor maker was lately having a macro effect on its stock and that of other chipmakers.

Shares of Intel were up 4.6% to $32.58 lately on Instinet, an electronic trading platform, after the company affirmed its revenue forecast in a mid-quarter progress report. The company said that it expects second-quarter revenue to come in slightly below $6.5 billion. On April 17, Intel told Wall Street to expect revenue in a range of $6.2 billion to $6.8 billion. Investors had been speculating for weeks about whether or not the semiconductor bellwether would meet those numbers.

The chipmaker's confirmation comes on the heels of reports that suggest the sector's cycle may have bottomed. Chip stocks surged today, following a report from the Semiconductor Industry Association that said the industry should rebound in the second half of this year and a statement from National Semiconductor (NSM) that the worst bookings quarter may be behind them. The Philadelphia Stock Exchange Semiconductor Index ended up 7.7% for the day.

Other chip stocks were gaining in sympathy in recent trading: On Instinet, Applied Materials (AMAT) advanced 2.1% to $57.17, Broadcom (BRCM) rose 1.2% to $40.71 and Xilinx (XLNX) climbed 1.7% to $50.20.

TranSwitch Semiconductor (TXCC), however, plunged 16.9% to $12.35 on Instinet after the company said it expects to post a second-quarter loss instead of an expected profit. The company blamed its problems on weakness in the telecommunications markets in Europe and Asia. It added that revenue would come in below consensus estimates.

In other news, 3Com (COMS) warned of lower-than-expected fourth-quarter revenue, as slowing sales impacted manufacturing utilization and led to higher provisions for excess inventories. The computer network equipment maker also said it plans to discontinue its line of consumer cable and DSL modems in a bid to reach profitability. 3Com was down 1.4% lately to $5.58 on Instinet.

The company forecast fourth-quarter revenue in the range of $450 million to $475 million, compared with $753.7 million in the year-ago quarter. On average, analysts polled by Thomson Financial/First Call expected the company to post fourth-quarter revenue of $575 million. 3Com also cited the effects of one-time charges related to its restructuring efforts, which it said would result in negative gross margins.

Separately, Handspring (HAND) cut its fourth-quarter forecast for revenue amid tough competition, significant price reductions in the market and softening consumer demand over the last two months. The maker of handheld devices now sees revenue in the range of $60 to $65 million, compared with revenues of $51.8 million in the same period last year. Analysts on average had estimated sales of $121.3 million for the fourth quarter. On Instinet, Handspring was lately down 9.8% to $8.12.

Because of technical problems, tonight's list of Island's most active stocks is not available.

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