After the bell, will PC maker Intel live up to bullish guidance?

IntelIntel Corp. (INTC) reports its third-quarter numbers after the market closes Tuesday. Below is a summary of key developments and analyst opinion related to the period.

OVERVIEW: Intel's CEO, Paul Otellini, has been talking up a turnaround in the personal computer market for seven months now, even while some of its biggest customers haven't been as bullish.
Otellini raised expectations for the PC market again last month by predicting that that PC shipments could defy predictions and grow this year. That's a rosier forecast than the ones offered by market research firms IDC and Gartner, which have both predicted a year-over-year decline in PC shipments in 2009, which would be the
first such drop since 2001.

Intel, the world's No. 1 maker of microprocessors for PCs and computer servers, raised its guidance in August based on stronger-than-expected demand. Intel said it expects revenue of $8.8 billion to $9.2 billion, and gross profit margin of 53 to 55 percent.

One question surrounding Otellini's commentary has been how much of Intel's sales in recent months have come from PC makers restocking depleted inventory, instead of a pickup in end-user demand. Hewlett-Packard Co., the world's top PC seller, saw sales in its PC division drop 18 percent in the May-July period. CEO Mark Hurd said in reporting those numbers in August that he was encouraged by stability he saw in the market, but that HP was "not yet at a point where we're ready to call it a turn."

BY THE NUMBERS: Wall Street expects Intel to post $9.0 billion in sales and 27 cents per share in profit. That's below last year's profit of 35 cents per share and sales of $10.2 billion.

ANALYST TAKE: Deutsche Bank analyst Ross Seymore wrote in a note to clients Thursday that he believes Intel's higher guidance reflects "healthier end market demand for PCs more so than a simple inventory refill." Seymore wrote that Intel likely saw strength across all its product lines and end markets, and will likely continue boosting profits into the fourth quarter because of a strong new product lineup and because the higher sales are
keeping Intel's factories fuller. When times are lean, Intel has to pay for operating factories that aren't churning out as many chips, which cuts into profits.

STOCK PERFORMANCE: Intel's shares rose about 15 percent in the third quarter. It climbed from $17.04 at the beginning of July to finish September at $19.57. The stock hit its 52-week high of $20.65 on Aug. 28.

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