In the coming days the quarterly earnings reports of some of the technology sector's most heavily traded names will be released. The results will have the potential to not only move the stock prices of the individual companies, but also the market as a whole. Here is what investors can expect from technology's biggest stars. (For related reading, see Strategies For Quarterly Earnings Season.)
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A Tale of Two Chip Makers
On Thursday after the market close, analysts are calling for the chip maker Intel (Nasdaq:INTC) to report a 3.4% improvement in its Q4 earnings per share (EPS) on a 19.7% increase in total revenue when compared to the year-ago quarter. Last month, the company said that its revenue will come in about $1 billion lower than previously expected due to hard disk drive supply shortages. Intel shares are up roughly 21% from a year ago.
Intel's rival Advanced Micro Devices (NYSE:AMD) is also slated to announce its earnings on the same day. Wall Street is expecting the company to check in with a 14.3% spike in EPS on a 3.9% gain in total revenue versus the prior year quarter. AMD has seen its stock price head in the opposite direction over the last year as it now sits around 30% below where it was trading at this time last year.
International Business Machines (NYSE:IBM) will weigh in with its Q4 results after the closing bell on Thursday. The consensus among analysts is that the company will announce a 10.5% advance in its quarterly EPS and a 2.5% increase in its top line. Shares of IBM have surged about 21% over the course of the last 52 weeks. (To learn more about earnings estimates, read Whisper Numbers: Should You Listen?)
All eyes will turn to Google (Nasdaq:GOOG) when the tech giant releases its Q4 earnings after the closing bell on Thursday. Analysts are expecting the company's EPS to jump 19.5% on a 31.6% pop in revenue over Google's Q4 in 2010. The company's stock price was up and down in 2011, but recently set a new 52 week high of $670.25 per share.
The company has been taking aim at Apple (Nasdaq:AAPL) in everything from smartphones to music. Google recently added a new music store to its Android Market which is fully integrated with its Google Music platform. Apple will announce its earnings on January 24th.
Microsoft (Nasdaq:MSFT) has said that its PC sales in Q4 may be worse than previously expected because of flood damage to factories in Thailand. The company has seen its shares drop by roughly 2 percent over the course of the last year, but a pickup in sales of Windows Phones and the release of Windows 8 tablets have the potential to give the stock a lift. Microsoft will report its quarterly results after the market close on Thursday.
The Bottom Line
Thursday will certainly be one of the most important days of the earnings season for technology stocks. Analysts are expecting major top line growth from Intel and Google, while Microsoft has fired a preemptive strike to reign in expectations. The forecasts that these companies provide will give investors a sneak peek into what may be in store from the sector for the remainder of 2012. These are releases that most serious tech investors will not want to miss. (For more information, read A Primer On Investing In The Tech Industry.)
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At the time of writing, Billy Fisher did not own shares in any of the companies mentioned in this article.