It's official: The semiconductor industry is recovering faster than the Wall Street analyst herd thought possible. Last night, Intel
Of course, if you've been paying attention, you already knew Intel would beat expectations.
Intel's sales jumped 17% quarter over quarter, to $9.4 billion, and the second quarter's $0.07 GAAP loss per share turned into earnings of $0.33 per share. That healthy bottom-line haul is not far off from the $0.35 per share seen in 2008 -- before the infamous Market Meltdown. The 8% annual sales slide was far smaller than the 16% revenue drop we should see across all semiconductor makers this quarter.
Management says that the surprisingly strong quarter rides on lots of consumer demand, while enterprise spending remains on the down-low. The enterprise shoe should drop in 2010 or 2011 as corporate IT budgets normalize and corporations work through their pre-installation testing procedures on the upcoming Microsoft
He also noted that Intel has been taking back lost market share from Advanced Micro Devices
If Intel truly did steal share from the competition, its competitors’ gains could be short-lived. If you're itching to buy AMD today, you might want to wait until Friday, in case the Thursday night report doesn't measure up to Intel's lofty performance. Only then will we know whether Intel's surprise was a sectorwide phenomenon or Intel's personal power. Whenever Intel is doing well, you could anticipate the good news to trickle down to end-user product pushers like Dell
Intel's economies of scale could make the chip giant one of the best investments in this depression.
Fool contributor Anders Bylund owns shares in AMD, but he holds no other position in any of the companies discussed here. Apple is a Motley Fool Stock Advisor selection. Dell, Intel, and Microsoft are Motley Fool Inside Value picks. Try any of our Foolish newsletters today, free for 30 days. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.