Intel (NASDAQ:INTC) is scheduled to release its quarterly earnings report tomorrow, and the chip giant has a lot riding on this particular quarter. With the company's earnings expected to contract not only in this quarter but throughout 2013, Intel could have trouble shedding its reputation as one of the worst-performing stocks in the Dow Jones Industrials (DJINDICES:^DJI) during 2012.

But Intel has come a long way from its PC-reliant days. Although it still suffers when dropping PC demand limits the need for its legacy PC microprocessors, Intel has finally made some progress in getting itself into the mobile arena in force. Let's take an early look at what's been happening with Intel over the past quarter and what we're likely to see in its quarterly report.

Stats on Intel

Analyst EPS Estimate


Change From Year-Ago EPS


Revenue Estimate

$12.89 billion

Change From Year-Ago Revenue


Earnings Beats in Past 4 Quarters


Source: Yahoo! Finance.

What will it take for Intel to grow its earnings?
Analysts have lowered their forecasts for Intel earnings in recent months, cutting their June-quarter estimates by a penny per share and slicing $0.04 per share from their full-year 2013 estimates. The stock, meanwhile, has defied that negative trend, rising more than 10% since early April

Intel continues to be a dominating force in the PC chip world, beating out perennial rival Advanced Micro Devices (NASDAQ:AMD) by maintaining PC market share of more than 85% in the first quarter. Intel has taken market share away from AMD gradually but regularly in the recent past, gaining 5 percentage points just since early 2012. Given the huge margins of its PC business, Intel should continue to profit even with declines in that area, so long as those declines don't occur too quickly.

But the big issue for Intel lately has been the slow adoption of its chips in popular mobile devices, including both smartphones and tablets. Mobile-chip specialist ARM Holdings (NASDAQ:ARMH) had managed to take the lead in many mobile devices, including iPad and iPhone products, and the original Surface RT tablet also used an ARM chip. But Intel has had a couple of high-profile mobile wins lately, getting its chips into the Surface Pro and also convincing Samsung to use Intel's Haswell chip in the next-generation Galaxy Tab 3 tablet. The company finally has its foot in the mobile door, and given the great prospects of Intel's Bay Trail quad-core processor, investors have high hopes that Intel can build on its success in the near future.

Moreover, Intel faces plenty of challenges. Qualcomm (NASDAQ:QCOM) has beleaguered Intel lately, also successfully taking advantage of the mobile revolution to boost its competitive position at Intel's expense. Moreover, given the weak margins from mobile chips compared to PCs, many investors are concerned that all Intel will accomplish with its mobile push is to accelerate the transition away from more lucrative PC business toward less profitable mobile-device chip sales, hurting the company's overall profit.

In Intel's earnings, pay close attention to the strategic vision that new CEO Brian Krzanich sets for the company. With so many possibilities lying before Intel, the direction Krzanich chooses for the company will have huge ramifications for the company's success both in the immediate future and in years to come.

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