INSTANT VIEW: Intel posts stronger-than-expected results

LOS ANGELES (Reuters) - Intel Corp reported quarterly earnings and revenue that surpassed Wall Street estimates, results that suggest the technology sector's recovery is gaining steam.

Shares of the chip maker, which also forecast stronger-than-expected revenue for the current quarter, shot up more than 5 percent following the earnings report.

COMMENTARY:

RICK SCHAFER, SEMICONDUCTOR ANALYST, OPPENHEIMER & CO.:

"They delivered well above seasonality -- 17 percent sequential growth is at least twice over normal seasonality. For the fourth quarter, they are guiding to seasonality off a much stronger previous quarter. That would indicate to us that the channel remains lean and orders remain solid for their products.

"I think probably what it tells us is that we are in recovery and there is some demand out there. How robust that demand is remains to be seen."

RAY RUND, MANAGING DIRECTOR AND HEAD OF RESEARCH, SHAKER INVESTMENTS

"They have costs down, they are getting utilization up, they caught a good tail wind on the top line and dropped a lot of it to the bottom line.

"It was a pretty good quarter and they gave really good guidance which I think probably indicates there is a very healthy market for the whole PC market, the whole supply chain.

"I would expect other companies that have content in PCs, especially mobility laptops, to probably have had good third quarters, too. The market will expect that they will report better earnings and probably push prices up tomorrow."

DOUG ROBERTS, CHIEF INVESTMENT STRATEGIST, CHANNEL CAPITAL RESEARCH

"I've always been positive on tech in this type of environment. It just makes a lot of economic sense. Intel is company specific. Basically, what it says is that the key players that are stronger can get stronger in this environment and gain market share."

LAURA DIDIO, ANALYST, ITIC

"Obviously, today's news is huge... When you're posting the strongest second to third quarter growth in the last 3 decades, your gross margins are up to near 58 percent, that's all great stuff. But also it's very welcome news for the high tech sector in general.

"I think what it says is we're on the mend, it's a rebound. I think this is jump-starting momentum, so the outlook for 2010 is very good.

"Intel is very well-positioned, no one even comes close to approaching their dominance."

PATRICK WANG, SENIOR ANALYST, WEDBUSH MORGAN SECURITIES "I think if you take a look at the third quarter, it reflected an environment where the PC supply chain was relatively strong. This confirms that back to school did come in decently, as we expected.

"Big picture: It seems like Intel is giving us a thumbs up on PCs and the concern is whether holiday season sales will materialize. If not, we are going to see inventory build in the first quarter. There will be inventory in the channel in the first quarter and that will be a very negative thing.

"I'd say that we have seen semiconductors and tech recover over last couple quarters. Intel is still going to be flat to down a little year-on-year. I'd say we largely recovered from the major downfall at the end of last year, but we are still not looking at growth yet. That is what 2010 going to bring.

"I do think that 2010 is going to grow over 2009. Clearly the second half is going to be stronger than first half -- the year in general should be good.

"I think that the build for Windows 7 probably helped boost Q3 and Q4 numbers -- we have to get more color from management on the call."

ROGER KAY, ANALYST, ENDPOINT TECHNOLOGIES

"This is a healthy sign for the whole sector. Intel is a bellwether not only in that it reports early, but in that it effects a broad ecosystem.

"It feels as if there are more and more signs that there's activity, that business levels are returning to something resembling normal."

DAVID KANTER, ANALYST, REAL WORLD TECHNOLOGIES

"I think the earnings from Intel have been driven by a number of things. First of all, it sounds like there was a recovery in terms of buying, driven by back-to-school sales and refilling of the channel pipeline.

"There's growth across all of the major microprocessor divisions. The growth for Intel's Atom was particularly

strong, particularly for a product line introduced in 2008.

"My sense is some of these sales were driven by other parts of the PC ecosystem, which were restoring their inventories to a more normal level."

HANS C. MOSESMANN, ANALYST, RAYMOND JAMES:

"They crushed expectations. Top line grew 17 percent sequentially, gross margins about 200 to 300 basis points higher than expected. Inventories are down, which is a good thing.

"These guys are a bellwether. Is it sustainable? We're recovering, but it's not an indication that we're overheating."

DOUG FREEDMAN, ANALYST, BROADPOINT AMTECH:

"The market is going to be very impressed by the fourth quarter margin guidance, if I were to pull one thing out of it. I am trying to figure out what is driving it to such a high number.

"From demand of PCs, the demand seems to be very good. The trend of providing more computing power at lower price points is definitely going to continue through next year. I believe the enterprise, the corporate environment, will improve and should allow the PC marketplace to expand possibly in an above average rate.

"I would stay away from trying to paint Intel and PCs as the chip sector as a whole. There are some pockets of the chip sector where they are shipping ahead of demand ... In the PC space I am more bullish. I'm a little less comfortable with some of the demand estimates in some of the other (chip) sectors."

(Reporting by Sue Zeidler and Gina Keating in Los Angeles, Gabriel Madway in San Francisco, and Rodrigo Campos and Ellis Mnyandu in New York; Compiled by Paul Thomasch)