It's been a good 18 months since chip king Intel (NASDAQ:INTC) missed expectations in an earnings report. Anyone want to bet that the semiconductor maker won't wow us once again when it reports third-quarter 2007 earnings on Tuesday?

What analysts say:

  • Buy, sell, or waffle? The Wall Street crowd sure doesn't. Thirty-eight analysts track Intel, with 30 rating the stock a buy, and eight more a hold.
  • Revenue. On average, analysts expect 10% sales growth, to $9.61 billion.
  • Earnings. Meanwhile, profits are predicted to soar 36%, to $0.30 per share.

What management says:
Intel updated investors on its Q3 guidance last month, raising revenue guidance on both the low and high ends to a new range of $9.4 billion to $9.8 billion. Margin-wise, the firm also raised its numbers, now expecting to gross about 52% on every dollar of revenue brought in.

Nor is that the only news at Intel this quarter. The company wreaked Havok on the software industry and rival AMD's (NYSE:AMD) gaming prospects in September, before moving on to challenge (or did it embrace?) Apple's (NASDAQ:AAPL) iPod hegemony. Also, let's not forget Intel's sizable investment in Clearwire (NASDAQ:CLWR).

(Does that validate Sprint Nextel's (NYSE:S) move into WiMAX? Drop by CAPS and tell us what you think.)

What management does:
Getting back to the future, Intel's promise of a 52% gross just has to raise investors' spirits. For all of Intel's success in beating estimates, the firm's gross margins have undeniably trended downward.

Margins

4/06

7/06

9/06

12/06

3/07

6/07

Gross

58.8%

57.9%

54.9%

51.5%

50.2%

49.0%

Operating

28.5%

25.2%

21.1%

17.5%

17.7%

18.3%

Net

20.5%

18.0%

16.7%

14.3%

15.1%

15.9%
All data courtesy of Capital IQ, a division of Standard & Poor's. Data reflects trailing-12-month performance for the quarters ended in the named months.

One Fool says:
Intel has returned nearly 30% to Motley Fool Inside Value members who took our advice to buy the stock in April 2006. But is 30% all we can expect from this company, or should we hunger for more?

Inside Value advisor Philip Durell thinks the good times aren't over yet. Reviewing the company's latest earnings report, he highlighted the gross margin issue mentioned above as the primary reason why investors reacted negatively to the report -- or overreacted, in Philip's opinion. Citing "$600 million savings in capital expenditures as well as lower inventory requirements and unit costs," anticipated gross margin improvement, and the firm's leap ahead of AMD in producing 45-nanometer chips, Philip calls Intel the "ultimate victor" in the ongoing price war with AMD.

That's a good enough reason to refrain from selling, but does this value guru actually recommend buying the stock at these prices? Pick yourself up a 30-day free subscription to Inside Value and find out.