Intel Expected to Report Bullish Earnings

SANTA CLARA, Calif. ( TheStreet) -- If history teaches us anything, then Intel ( INTC) will usher in the tech earnings season by delivering strong second-quarter results tomorrow afternoon.

Going back eight years, Intel has met or exceeded the average analyst earnings estimate for the second quarter, according to, and has beaten consensus every quarter for the last year.

Analysts surveyed by Thomson Reuters expect Intel to post revenue of $10.25 billion and earnings of 43 cents a share, compared to $8 billion and 18 cents a share in the same period last year.

"We believe an improved mix is able to offset slightly lower second-quarter unit demand, with an improved gross margin," explained Gleacher & Company analyst Doug Freedman in a recent note. The analyst firm, which rates Intel a buy, expects the firm to post earnings of 49 cents a share, well above consensus estimates.

Freedman believes that Intel stands to benefit from ongoing strength in the PC market, a better-than-expected margin profile and stronger pricing.

Yet despite dominating the market for PC chips, where Intel competes with the likes of AMD ( AMD), the tech bellwether has yet to make its presence felt in the booming smartphone sector. Wall Street will be monitoring the company's call for an update on Moorestown, Intel's 1.5-GHz smartphone chip that was supposed to launch in handsets this year.

Intel recently said that it hopes to have Moorestown running in smartphones in early 2011, but could face intense competition from established competitors such as Samsung.

As for the immediate impact of Intel's results, in the past, the company's stock has often dipped. For the last five years, during the trading session immediately after the company's second-quarter, the stock has an average return of -1.71%.

The last two years, however, have seen a greater degree of bullishness, with the stock rising 0.93% in 2008 and 7.29% in 2009. In prior years investors had sold off the stock, which prompted drops of 7.51% in 2006 and 4.83% in 2007.

As a key barometer for the tech sector, Intel's numbers are also closely watched elsewhere in Silicon Valley, and good results later today could be a shot in the arm for other PC and server stocks such as Dell ( DELL), Hewlett-Packard ( HPQ) and IBM ( IBM).

-- Reported by James Rogers in New York

-- Additional reporting by Rob Holmes

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