Second quarter earnings season is finally upon us. After first-reporter Alcoa released positive results on Monday, Growth Portfolio member and technology bellwether Intel (INTC) reported blowout numbers last night after the market’s close.

The largest computer chip maker in the world collected $2.89 billion in net income, or 51 cents a share, during the second quarter – easily outpacing consensus estimates of 43 cents. Importantly, the semiconductor giant accomplished this through outperformance on both the top-line (revenues were $10.8 billion versus expectations of $10.3 billion), and the bottom line, with further gross profit margin improvements (67.2 percent versus 50.8 percent in the same period last year). With this strong showing, the company upped its gross margin estimate for the full-year: to 66 percent from a previous prediction of 64 percent.

Intel’s forward-looking guidance also beat expectations. For the current quarter, the company now expects total sales to be $11.6 billion – plus or minus $400 million. Analysts had estimated $10.9 billion, so Intel’s most bearish guidance now exceeds the average analysts’ expectations by $300 million. CEO Paul Otellini cited higher enterprise spending as the catalyst behind the impressive results and forecast. Corporate customers are replacing old desktops and laptops, while other companies like Google and Facebook are increasing the size of their server farms.Read more...

Earnings season is just getting underway and the first major report out on Monday, from Alcoa, left many investors disappointed. The largest U.S. aluminum producer managed to cut its losses from $497 million during the same period a year prior to $201 million this quarter, but the market expected more from the company’s sales, which grew only 18 percent to $4.89 billion. By contrast, aluminum prices have risen by roughly 50 percent over the last year. Alcoa, a bellwether for the performance of the overall market, given the wide use of its product, did not set the right tone.

However, the outlook improved late yesterday when Intel (INTC), which is part of our Growth Portfolio, reported its first quarter results. By almost all measures, the results were impressive, with Intel having its best first quarter since the company’s founding in 1968. This suggests that other technology companies may be releasing strong figures this quarter as well; but with Intel’s market share of computer processors over 80 percent, the results more importantly serve as a proxy for end demand and perhaps a bellwether for economic health.Read more...

Short-Term Key: Negative  Long-Term Key: -81 (Neutral-to-Negative)Read more...