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Forget Goldman, Intel's Strong 2Q Results More Important, Strategist Says
Posted Jul 14, 2009 03:38pm EDT by Aaron Task in Computers, Semiconductors, BankingUpdated from 3:38 p.m. EDT
Update: Intel reported better-than-expected results after the close on Tuesday. The chip giant reported second-quarter revenue of $8 billion, above the consensus of $7.3 billion. Excluding a one-time charge stemming from a European Commission fine, the company posted EPS of 18 cents a share, well ahead of consensus of 8 cents.
“Intel’s second-quarter results reflect improving conditions in the PC market segment with our strongest first- to second-quarter growth since 1988 and a clear expectation for a seasonally stronger second half,” president and CEO Paul Otellini said in the firm's press release.
For the current quarter, Intel forecast revenue of $8.1 billion to $8.9 billion vs. the current consensus of $7.8 billion.
Intel shares rose in the initial after-hours reaction, ahead of its conference call slated for 5:30 p.m. EDT.
Earlier: Stocks managed only meager gains Tuesday despite blowout results from Goldman Sachs this morning.
But the press is paying too much attention to Goldman and the financials generally, says Vinny Catalano, president and global investment strategist with Blue Marble Research, who says Intel's post-close results are more important.
While not diminishing the importance of the financials, Catalano's point is the market needs new leadership, and economically sensitive "cyclical" areas like tech and industrials, as well as major pharma names, will give a better barometer of the state of the global economy.
On that front, Catalano is encouraged by results from Alcoa and Johnson & Johnson and believes Dell's disappointment is more a result of its overexposure to developed markets vs. a sign the global "green shoots" are turning brown.
Like most, the strategist and blogger believes second-quarter results must exceed consensus expectations in order for the market to resume the rally off the March lows. Unlike some, Catalano is confident S&P 500 earnings will exceed the consensus estimates of $14 per share of operating earnings.
That should "encourage" the market and lead to a resumption of the rally, Catalano says, as we discuss in more detail in a forthcoming segment.
29 Comments
Jo - Tuesday July 14, 2009 08:43PM EDT
As if stateside companies never threaten, cajole, leak. Get a grip. And as for your wife; I think she should sprint and not walk with that offer you gave her, to the next gut who possesses a modicum of critical thinking. Even a fish wouldn't get into trouble if he kept his mouth shut.
BigPictureGuy - Tuesday July 14, 2009 11:11PM EDT
Agree that GS posting big numbers is not as important as INTEL. GS is a financial services company which is involved in businesses that do not reflect the "normal" economy of mom and pops (the rest of us). Virtually everything these days electronic use chips and that market is an indicator or demand = consumer activity. GS making money in the equity markets shouldn't surprise anyone. They understand market psychology. They know that investors don't want to miss the big run-up so they pile-on in anticipation of future pricing. Simple.
Byron B - Wednesday July 15, 2009 01:38AM EDT
To the last poster: Ditto. Build it first and then you'll have the money to buy it. No artificial financial steroids. Just inventions and jobs
Suman - Wednesday July 15, 2009 03:16AM EDT
Forget Goldman -- They had spare Billions laying around called "TARP" and dumped it in a beaten up $35 crude market creating a false run backed with enough cash to drag in the "the recession's over" lemmings. GS sold off leaving bag holders as they do every time. They profited and paid back the govt TARP resulting in a blowout profit report. Not hard to figure out.
Erica - Wednesday July 15, 2009 05:39AM EDT
this is a crise everywhere and we must learn to adjust to the situation for the time being whilest we also work hard to solve it.
Yahoo! Finance User - Wednesday July 15, 2009 07:25PM EDT
Wall street &...all together criminal team!!!
SpliffleBerry - Thursday July 16, 2009 01:42PM EDT
Intel makes real stuff and they export to the world. They know how to run a spreadsheet and plan for existing market conditions. Go Nano-Blue :-) !
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Jon M - Tuesday July 14, 2009 08:30PM EDT
Please read the Rolling Stone article by Matt Taibbi. You will notice what the main stream media is missing about Goldman Sachs. The bubble masters. Still waiting for more numbers to be reported. And the better than expected, is just a shell game.