Zacks_Analysts' Blog : INTC Beats; Guidance Good - Analyst Blog

Right after the close, Intel (INTC) reported very strong numbers. Revenues totaled $8 billion, far above expectations for $7.18 billion. Non-GAAP EPS totaled 18 cents, 11 cents above the consensus.



Q3 revenue guidance was also far above the average forecast.



The numbers reinforce my view that a recovery in the chip sector has started. Both Micron (MU) and National Semiconductor (NSM) previously topped expectations and Texas Instruments (TXN) raised its second-quarter guidance. Yesterday, chip equipment maker Novellus (NVLS) said it was seeing a "rebound in orders".



These reports follow what have been notable increases in earnings estimates for several companies in Electronic Computer-Semiconductor. Though the year-over-year comparisons won't be good, the second-quarter results for other chipmakers should show that a recovery is in process.



Shares of INTC are soaring in after-hours trading. If the upbeat guidance translates into further positive earnings estimate revisions - and they should - INTC could get the buying pressure necessary to break out of its current range.



Disclosure: Charles Rotblut holds iShares Semiconductors (IGW) in Zacks ETF Trader and personally owns the ETF.