April 17, 2012 / 10:26 PM / 8 years ago

Instant View: Intel, IBM, Yahoo in earnings trifecta

(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.”

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

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