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...

In Monday’s Market Update, we highlighted the few information technology companies that we feel qualify as franchises. With one exception, all of those companies are represented in our Growth Portfolio. Today, we add Qualcomm (QCOM) to the portfolio – completing our technology franchise portfolio. Read more...