Intel Q4 earnings preview

Intel Corp. (NASDAQ: INTC) should hit the $0.40 EPS expectation when it reports Q4 results next Tuesday even as more doom-and-gloom is posited about the PC industry's demand slowdown. Intel, the world's largest microchip maker, is expected to see a 12% rise in revenue for its latest quarter to $10.84 billion, compared to $9.69 billion from the year-ago period.

Analyst houses like Citigroup have said that "pockets of PC demand weakness" do indeed exist, but overall PC trends (demand) are solid. This equates to Intel doing just fine next Tuesday. My guess is that the chipmaker will report above-average earnings of $0.41 EPS, just a penny higher than the consensus estimate. The ability of Intel to have lower-cost chips for PCs available during the last quarter of 2007 (holiday shopping season) will give Intel a boost as well.

Intel has also been taking back share lost to rival Advanced Micro Devices, Inc. (NYSE: AMD), who is widely expected to report a quarterly loss next week when it reports its Q4 numbers. If Intel, who was just recently under the gun of AMD in 2006 in terms of performance, can sock it up and really blow the doors off of Q4 estimates, 2008 will indeed appear rosy for the chipmaker. Intel's international markets will also help it weather any demand sluggishness in the U.S., even as customers snap up laptop PCs left and right this coming year.