Will

Intel

(INTC) - Get Report

or won't Intel?

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Intel -- Will It or Won't It?

Intel Should Tell Us a Thing or Two About Tech on Thursday

That question, whether Intel will warn that the second quarter looks weaker than anticipated, is about to be answered. After weeks of

speculation, the answer is due Thursday afternoon during Intel's first scheduled midquarter update.

Intel, which makes microprocessors for personal computers, is receiving all this attention because investors are searching for a bottom in the chip sector's cycle. When chip fundamentals begin improving, the stocks often rise quickly, so investors who miss the bottom lose out on some upside. But if they get in too early, they stand to suffer. Intel's report could provide vital information in this search. Then there's the simple fact that with its roughly $200 billion market capitalization, Intel is a bellwether for the struggling technology sector.

Even if Intel warns, it's possible that investors will bid up the stock on the belief that the worst is nearly behind the company. But they may want to start looking at some of the

bigger issues that'll play out over the coming months, including the fact that the personal computer industry is recovering more slowly than expected, putting third-quarter and second-half estimates at risk.

Wall Street analysts and investors are divided about what Intel will say Thursday. The company will release a statement after the close of regular trading and follow that up with a conference call with the company's chief financial officer, Andy Bryant.

Some firms, such as

Merrill Lynch

, say the company can't hit the range of $6.2 billion to $6.8 billion it

supplied on April 17 when it released first-quarter results. Others, like

Salomon Smith Barney

, say the company will hold to that guidance, though it could lop off the range's upper portion. (Neither Merrill nor Salomon has done underwriting for Intel.)

A warning would be far from unprecedented. During each of the past three quarters, Intel has had to lower its revenue guidance due to a sales slowdown stemming from large inventories and weak consumer demand.

According to

Thomson Financial/First Call

, analysts expect Intel to earn 11 cents a share on revenue of $6.3 billion in the second quarter. In the first quarter, it earned 16 cents a share on revenue of $6.7 billion. The second quarter is traditionally a slower time for Intel, and during the first-quarter earnings conference call, executives said they believed the company was returning to normal seasonal patterns.

But not everyone is on board with that notion. Merrill's Joe Osha said in a research note Wednesday that he's looking for microprocessors -- the bulk of Intel's business -- to bring in about $4.27 billion in revenue, down from $4.77 billion in the first quarter. Other revenue, which includes chipsets, motherboards, flash memory and the fledgling networking and communications business, also are seen falling. Of those, flash and communications are expected to be the weakest.

Intel is facing lower-than-expected shipments of its

Pentium 4

chip, which has gotten off to a slow start after being launched in November. Intel

cut prices sharply on the Pentium 4 earlier this year to win back market share that it had lost to smaller rival

Advanced Micro Devices

(AMD) - Get Report

. But this strategy may not be working.

And there's evidence from computer makers that business isn't getting better.

On Wednesday,

Hewlett-Packard

(HWP)

came out with its second revenue warning in three weeks and with two months left in its third fiscal quarter ended July. The PC and printer maker said that the technology spending drop-off in the U.S. and Europe had spread to Latin America and Asia. It also said that May was soft in both the consumer and enterprise, or large business, markets.