Skip to main content


Groundhog Day:

Like the

Bill Murray

movie, I feel like we just did this, but ...


(INTC) - Get Free Report

did it again. By that, I mean the only reason it beat first-quarter estimates was not because it did a better job making chips, but because it made more money than it expected from stock market gains.

In fact, if it hadn't been for the better-than-expected stock market gains, the company would've missed the consensus estimate of 69 cents per share by a penny. The company announced that it had earned 88 cents per share, but 17 cents came from a tax credit, leaving 71 cents for "true" earnings.

Taking a closer look at the numbers, Intel said that its interest and other income (which includes investment gains) generated $640 million of income. Last quarter, in the "outlook" part of its press release, the company was forecasting $500 million in interest and other income for the first quarter.

That $140 million difference, after tax, breaks down to 3 cents a share. In other words, the grand total, based on Intel's prior guidance, would've been 68 cents.

"What Intel has successfully done is call their 'earnings' chips profits and stock market profits," says Bill Fleckenstein of

Fleckenstein Capital

in Seattle, who was quite vocal



quarter over the same issue. Of course, Intel bulls argued (loudly, as I recall) that it doesn't matter how Intel makes money as long as it makes money.

Fleckenstein says that although the company is given credit for beating the number, "they still didn't get to the bar they set."

Going forward, Intel has set the bar at $725 million in interest and other income for the second quarter. Any more days like last Friday and, who knows, the real number could actually be



Market mania:

Plenty of readers are saying, "Enough already," with this column's focus on the markets, rather than individual companies (especially companies that are up to no good). However, you deserve this explanation: When the market goes into crisis, the story shifts from the companies to the market itself. And plenty of my sources and readers are in the thick of it. My job, at that point, is to tell you what they're hearing so you can get more perspective on the markets.

My favorite comes from reader

Jack Mark

, who writes, "Until people really get the fear of the Trading God put into them, we all might as well just invest in whoever makes Pepto-Bismol." (

Procter & Gamble

(PG) - Get Free Report


Herb Greenberg writes daily for In keeping with TSC's editorial policy, he doesn't own or short individual stocks, though he owns stock in He also doesn't invest in hedge funds or other private investment partnerships. He welcomes your feedback at Greenberg also writes a monthly column for Fortune.

Mark Martinez assisted with the reporting of this column.