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...

Finally, some positive news. The world’s largest semiconductor company, Intel (INTC), which we profiled here just two weeks ago, reported blow-out earnings last night – and the stock reacted very positively today. During the second quarter, the company collected just over $8 billion in revenue, better than the $7.3 billion analysts were expecting. And they did this as they drew down their own inventories by $420 million.

Further, the company’s gross margins expanded from 46 percent last quarter to 51 percent in the one just completed. The company reported a net loss for the quarter of $398, or 7 cents a share due to a $1.45 billion antitrust fine levied by the European Union. Excluding this one-time item, which may even reverse itself if Intel wins its appeal, the company earned 18 cents a share – more than double expectations of 8 cents.Read more...