Earnings Estimates (High/Mean/Low): $0.49/$0.427/$0.41

While Alcoa’s (NYSE: AA) earnings report may signal the beginning of earnings season for the market in general, Intel’s (NASDAQ: INTC) report signals the beginning of the season for the land of tech.  As the first true tech bellwether to report each earnings season, INTC’s report is often used to gauge how the season will go for other big IT names.

INTC has beaten estimates in 7 of the last 11 quarters and 4 of the last 5.  The company is set to report Q2 earnings on Tuesday, July 13th after the bell.  Expectations are for the chip maker to report $0.427/share, well ahead of the $-0.07 the company reported for Q2 last year and roughly equivalent to the $0.43 they reported in Q1.

Since hitting highs of $24.37 on April 15th, shares of INTC have experienced a dreadful run of lower highs and lower lows, finally hitting a low of $18.96 on July 2nd.  Shares staged a bit of a recovery last week, finishing up at $20.24 and helping to keep its downward-sloping 50-day moving average from piercing the 200-day mark.  Nonetheless, the infamous “dead cross” is still on the table.

Shares are trading at about 10X 2011 estimates and appear to be pretty cheap, but in a down market everything tends to look “cheap” until it gets even “cheaper.”  Given INTC’s recent propensity to sell off a bit even on the heels of a significant earnings beat, it would probably be best to avoid accumulating shares ahead of the Q2 report.  However, if they do in fact stick to the script and sell off following a beat, picking up shares at/around $19.20 should offer solid returns over the longer-term.

Disclosure: No holdings in INTC.

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