Let's see what Intel says on Tuesday.
This could be the beginning of the end
of this semiconductor crash.
With its new innovative processor lines
 and savvy use of capital
 (during the downturn),
look for Intel to lead the way
out of the deep market depths!
-- Me, two days ago (presented as free verse in honor of National Poetry Month)

Don't look too far into their declining stock movements today -- mighty Intel (NASDAQ:INTC) is starting off this earnings season on a bright note. Yes, future revenue forecasts might be "muddy" in that they don't produce precise guidance, but I give more weight to what CEO Paul Otellini had to say. He didn't beat around the bush in calling the bottom to the PC sales downturn -- in so many words.

"We believe PC sales bottomed out during the first quarter and that the industry is returning to normal seasonal patterns," Otellini said. That bold statement presumably draws on ordering trends from Intel's major customers such as Hewlett-Packard (NYSE:HPQ), Dell (NASDAQ:DELL), and IBM (NYSE:IBM). These guys need to order chips before they can build and sell their computer systems, after all.

There are two caveats to this rosy picture:

  • Sales fell further than normal this quarter, compared to first-quarter seasonal trends in recent years. A 13% quarter-over-quarter drop to $7.1 billion can't measure up to the average seasonal slump of about 8% in the last five years. This, plus Otellini's comments, leads me to believe that the rock-bottom bounce happened rather late in the quarter.
  • And Paul Otellini is only calling an end to the PC market woes. In other words, there may be signs that consumers may be snapping up laptops, netbooks, and desktop systems again -- but a return to health in the crucial server and workstation markets is not in the books yet. In the conference call, Paul described the server segment as "in reasonable shape."

So, the good news should extend to other consumer-facing businesses in the industry too. I'll even stick my neck out and predict a surprisingly healthy report from Intel rival Advanced Micro Devices (NYSE:AMD). The eternal underdog is currently playing the bang-for-your-buck dark horse next to Intel's very capable Core 2 products (including Nehalem). That role should fit these market conditions like a glove.

Of course, I'm talking about AMD's revenue here, not earnings -- AMD won't match Intel's $0.11 of earnings per share. But if fellow tech big-wigs IBM and Sun Microsystems (NASDAQ:JAVA) can follow up with healthy numbers in the next couple of weeks, this earnings season might not be the blood bath that so many have counted on. "Green shoots" on the horizon? We might be in the foothills of a real all-markets recovery here.

Further Foolishness:

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Fool contributor Anders Bylund owns shares in AMD, but he holds no other position in any of the companies discussed here. You can check out Anders' holdings or a concise bio if you like, and The Motley Fool is investors writing for investors.