Intel boosts guidance, high-tech hopes
The latest positive indication of improving -- or at least stabilizing -- economic conditions came this morning when microchip giant Intel (INTC) boosted its third-quarter revenue guidance above Wall Street's expectations -- a welcome sign that business activity is set to improve for the world's largest chip manufacturer.
Intel said it now expects revenues of $8.8 billion to $9.2 billion, topping its last estimate, released in July, which predicted revenue in the $8.1 billion to $8.9 billion range. Intel shares were trading up five percent to $20.44 in early trading on the tech-heavy Nasdaq exchange.
Prior to today's announcement, analysts canvassed by Thomson Reuters were expecting $8.55 billion in revenue for the next quarter.
Intel's announcement came one day after Dell (DELL), the large PC manufacturer, expressed optimism about its prospects for the next quarter. In addition to the effects of the government's massive economic stimulus plan, consumer spending should strengthen, and Dell expects large companies to resume spending on technology in 2010, the company said in a conference call with analysts.
Technology companies generally see stronger sales in the second half of the year, as students gear up to go back to school, and shoppers hunt for holiday gadgets.
Broadpoint AmTech Intel analyst Doug Freedman told the AP that Intel's new guidance suggests that consumers are beginning to start spending again, and may augur the "very first signs of a little bit of recovery" in corporate spending.
But a new report out this morning which showed U.S. consumer confidence dipping to its lowest levels in four months reinforced the fact that the economy has many miles to go before it emerges from the recession. The report, issued by Reuters and the University of Michigan said its final index of consumer confidence fell to 65.7 in August from 66.0 in July.