INTEL & CSX REPORT “BETTER THAN EXPECTED” QUARTERS
13 April 2010 by Cullen Roche
16 Comments
As expected, Intel is reporting a much “better than expected” quarter. The numbers were well above analyst estimates:
- Revenue $10.3 Billion vs estimates of $9.83 Billion
- Gross Margin 63%
- Operating Income $3.4 Billion
- Net Income $2.4 Billion
- EPS 43 Cents vs estimates of 38 cents.
CSX also reported a “better than expected” quarter after the bell with EPS of 78 cents vs estimates of 70 cents. More important were comments from CEO Michael Ward on the economy:
“CSX drove strong efficiencies in its operations and produced outstanding results as the economy continued to recover”
As we’ve been saying for several months now, the estimates for Q1 appeared woefully shy of reality. It never ceases to amaze me how far off the analysts can be. Both stocks are rallying in the after hours market as market participants are clearly as surprised as the clueless analysts.
I fear the “Sell the News” earnings season is going to turn into the “yes, we can get even MORE overbought” earnings season. This has to be on the list of the worst times in market history to be net short….
Can this bullishness persist thru all of earnings season? I have been calling for a strong earnings season for the last two months. Is the market really this surprised by the news? Am I that much more prescient than the market? No. We’ve been rallying into earnings with expectations that exactly this would happen….We might not plummet, but a good earnings season is priced in.
So are you saying the market will trend higher but not a lot higher? I don’t see any profit taking at all.
Well, I’ve been thinking this would be a “sell the news” earnings season, but I’ve been wrong….I still think buying stocks here is greedy.
“I still think buying stocks here is greedy”
big time cognitive bias here, tpc…if you disagree with the bulls, then you don’t have to denigrate their values, suggesting that they are greedy, rather than maybe they are just simply investing as best as the can by their lights.
just like hedgieinsize saying bulls have drunk the kool aid…doesn’t help to try to understand the other side of the trade when you think the other side is without value (as opposed to without merit)
Don’t be so sensitive Chris. You’ve been right so no one is calling you names.
I’ve nailed the economics behind this market and the trading of late has been a bit off….I am the first to admit it….No one is calling anyone names….
ok, phew, i thought someone called me greedy…which means getting more than you are entitled to…if i am right being long, i was thinking that i was entitled to my gains…
I’ll take half based on my research. I accept cash and checks. Thanks!
you shouldn’t take a check from me
What was the tax rate INTC used in for this quarter. I recall that they had a very low tax rate last quarter which helped made a small beat become a blowout.
It looks like a clean quarter to me. 29% tax rate vs 13% or so last quarter (if I recall correctly).
What surprises me is that Intel beats just about every quarter and everyone seems so shocked about this. They sandbag the analysts like crazy and yet they always pit their estimates right at the company guidance. You have to wonder who pays these guys.
My personal estimates are consistently better than theirs by a wide margin…
AAPL is another one of those names that sandbag analysts. I agree, these guys have better access to information and couldnt guestimate any better than my dog. However, its the YOY comparison which is what we should be looking at. and Forward multiples this time around since we honestly can experience another sudden drop-off in demand if we end up having a double-dip recession. Though from the looks of it, if we do double-dip, the second dip will be of a much larger magnitude than the first, and I dont think analyst are pricing that in either.
I’d love to know INTCs unit sales numbers. I build machines and have been using intel processors for years. I could easily pick up a processor in the $60-90 range. Since mid 2009, I can’t find a boxed processor for less than $120, unless it is clearance or a very old model. Intel can sell 40% less product at 100% of the cost of 2 years a ago and have a blow out quarter. It is nice being a Monopoly. I bet AMD isn’t a where near this good, in terms of revenue growth.
Doesnt INTC have a couple of anti-competition lawsuits pending? I know there was one in EU and possibly US. That’s definitely going to cost a bit.
Regardless, as stated, their largest growth (or likely all their growth) came from server business. Guess which industry is the largest purchaser of technology (hardware and software)? Yup, the financials. Seems like they knew they’d be outperforming for sometime now and went with large scale infrastructure upgrades. This could’ve been to reduce costs with lower power processors and blades. I seem to recall a recent JPM shareholder letter citing a doubling of technological productivity at half the cost from 5 years ago…..
INTC makes good products for sure but its never good to see such a dominant position held by a single company.
intc settled with amd by making a payment and agreeing to certain business conduct measures which were not troublesome. they are currently before the ftc on a civil admin hearing, and the eu competition board. these actions won’t be determined until next year, and likely will be manageable in terms of cost and business practice change required.
You know, I’ve been fearful when others have been greedy and it’s cost me a fortune. I cannot believe this runup with no pullback. The train has left the station and I was not on it. But trying to run along side the tracks and leap on while it’s at full speed does not seem prudent. At some point, it will slow down or come completely off the rails. One thing’s for sure: I will never again bet aqainst stocks when interest rates are zero.