* Talk of Intel pre-announcing positive Q1 - analysts
* Shares up 4 percent
(Adds analyst comments, updates shares)
By Ian Sherr
SAN FRANCISCO, March 16 Shares of Intel Corp
(INTC.O) jumped 4 percent to their highest in more than a year
on expectations that robust Asian sales and a rebound in
corporate spending will help the chipmaker beat current-quarter
The rally propelled gains in other semiconductor stocks,
with Advanced Micro Devices Inc AMD.N and Nvidia Corp
(NVDA.O) both rising more than 3 percent.
In January, Intel forecast revenue and margins for the
first quarter above Wall Street expectations, as demand for
personal computers from corporations bounced back after years
of stretched budgets and belt-tightening.
Analysts said there was talk in market that the company
could pre-announce strong results soon. [ID:nN13151343]
"There's speculation that Intel will have a positive
pre-(announcement)," Auriga analyst Daniel Berenbaum said.
Intel spokesman Chuck Mulloy declined to comment and said
the company was in a quiet period ahead of its first-quarter
earnings announcement on April 13.
Analysts on average are expecting Intel to report a
current-quarter profit of 37 cents per share on sales of $9.79
billion, according to Thomson Reuters I/B/E/S.
Many industry executives and analysts say there were
signals early in the year of a strong return of spending by
companies to upgrade equipment and software, though some expect
growth to sharpen only in the latter half of 2010.
Broadpoint AmTech analyst Doug Freedman said Intel only
considers pre-announcing earnings if senior management receives
an update that is outside the company's range by a certain
Additionally, Freedman said, if the company's revenues and
margins are better than expected, those two factors could push
the bottom line of estimates up by as much as 10 percent.
"I won't be surprised by a positive pre-announcement, but I
don't know what guideline they would use to do that," he said.
GOOD NEWS FROM CHINA
Options traders exchanged about 244,000 contracts in Intel
-- three times the normal level, according to option analytics
firm Trade Alert. The volume was led by the trading of 204,000
call contracts, as many traders rolled their bullish positions
from soon-to-expire March options to the April options.
March options expire on Friday after the close.
"Although overall option volume in Intel is more active
than usual, this could be attributed to the expiration of March
options," said William Lefkowitz, options strategist at
brokerage firm vFinance Investments in New York. "Some traders
might be rolling over their positions from March into the April
Intel shares have steadily risen this year, by nearly 4
percent as of Monday. Tuesday's rally sent the stock to the
highest level since September 2008, when markets began
spiraling downward during the financial crisis.
Apart from talk of a strong first quarter, analysts also
cite the Chinese New Year in February -- a season of high
spending in China -- as a reason for robust sales, especially
in computers, in the world's No. 3 economy.
"Our contacts roundly hailed the PC sector as likely to be
robust for the remainder of the year," FBR Capital Markets
analyst Craig Berger said in a recent note to investors.
Those factors, along with Intel's launch of new, more
powerful server chips on Tuesday [ID:nN15204554], helped push
the stock over its 52-week high.
Wedbush Morgan analyst Patrick Wang said that triggered a
round of buying by hedge funds and other investors in
The Philadelphia Semiconductor Index .SOXX rose nearly 3
percent to 359.87, while AMD stock shot up 5.38 percent to
$9.40 on the New York Stock Exchange. Nvidia rose 3.5 percent
to $17.76, Micron Technology Inc (MU.O) rose nearly 5 percent
to $10.21, and Intel rose almost 4 percent to $22.01 on
(Additional reporting by Doris Frankel in Chicago; Editing
by Richard Chang)