(Adds commentary)
April 17 (Reuters) – Intel forecast better than
expected revenue and said the first Intel-chip-based smartphones
will emerge this quarter, marking its response to a consumer
shift toward tablets and other mobile gadgets.
IBM, which also reported after the closing bell,
posted first-quarter profit above Wall Street’s targets and the
blue chip is closely watched as an indicator of enterprise IT
spending.
Completing a trio of major earnings released on Tuesday,
Yahoo Inc, which is going through a massive internal
overhaul, posted better than expected earnings.
COMMENTARY:
Intel:
ALEX GAUNA, ANALYST, JMP SECURITIES
“It looks like a solid result and a good guide.
“I would have liked to see a stronger enterprise computing
number. We maybe got a little ahead of ourselves with
expectations. The fundamentals are strong in cloud.
“The quarter was a beat, and I don’t think that the tablet
threat is growing. You could argue it’s getting less
significant. The tablet seems to be going more and more into
e-readers, 7-inch screens”, which are less of a threat to larger
PCs.
“I’m still expecting a strong second half of the year.”
VIJAY RAKESH, ANALYST, STERNE AGEE
“Expectations were a little high and the stock had a good
run going into earnings. The results and guidance are in line
but there were slightly higher expectations.
“Mobile is still small and probably not material at this
point. Their bread and butter continues to be PCs. We think
demand has mostly come from restocking in the channel and supply
chain, rather than market demand. We may get more color on the
call about that.
Advanced Micro Devices, or “AMD is actually growing
faster than Intel. They have been taking share on the notebook
side.”
SRINI PAJJURI, ANALYST, CLSA
“Revenues came in better than expected. The margin guidance
for Q2 looks a little light, and that’s probably why the stock
is down.
“Given the topline is slightly better than expected, it
doesn’t seem like there’s a meaningful impact from tablets right
now. The PC market is holding up pretty well.”
IBM:
BRIAN MARSHALL, ANALYST, ISI GROUP
“IBM has been on a great tear here. I think the stock was
priced for perfection. There’s a little bit of profit taking
here.
“Revenue was a little light relative to expectations. They
did a good job on the bottom line. The guidance was good.
“At the end of the day the numbers looked fine to me.
“What they’re doing is maximizing their operating margins by
making sure they’re not taking on revenue opportunities that
aren’t going to give them high margins. At the end of the day
there’s a lot of pruning going on here.
“The important part is they continue to expand earnings. EPS
looked pretty good.
“The black eye is systems and technology. Their hardware
business was down 7 percent year over year. The area that
continues to shine is software. That was up 6 percent year over
year.”
Yahoo:
CLAYTON MORAN, ANALYST, BENCHMARK CO
“Very modestly ahead of expectations, disappointing display
results (down 4 percent), that is obviously their most important
business.
“Yahoo continues to struggle in the Internet advertising
space.
“Investors are anxious to hear how (CEO Scott) Thompson can
turn this around and are largely skeptical he can do it. It’s
going to be hard for him to articulate a convincing strategy but
investors are all ears now.”
COLIN GILLIS, ANALYST, BGC PARTNERS
“Here is the one piece that is always sad about Yahoo. Their
income from operations was about $169 million and their earning
and equity interest was about $172 million.
“Their minority stake in their investments is generating
more profit than their core business.
“So far Scott has done the right things. He is bringing in
some of his own people, he’s taking costs out of the system.
His first quarter out of the gate, he controls what he can
control, which is earnings.”
(Reporting by Jennifer Saba and Sinead Carew in New York and
Sarah McBride and Alistair Barr in San Francisco)
