Earnings Preview: Intel expected to post solid 2Q

OVERVIEW: In April, Intel said its first-quarter profit fell 12 percent from the year-ago period. However, results met analysts' subdued expectations, reassuring investors who had been concerned that Intel would suffer from a broader downturn in technology spending.

Intel's revenue rose 9 percent in the first quarter, edging past Wall Street estimates.

The company's momentum continued in June, when Intel debuted its Atom chips for low-cost laptops. The introduction drew accolades from analysts and investors who see low-cost laptops--or "netbooks"--as a high-growth product segment, especially in emerging markets. The research firm IDC projects worldwide shipments of low-cost laptops will grow from fewer than 500,000 units last year to more than 9 million in 2012.

However, June also brought Intel some regulatory setbacks, as the Federal Trade Commission opened a formal probe into the Santa Clara, Calif.-based company's sales practices, which have come under scrutiny from antitrust regulatory agencies in the U.S. and elsewhere. Intel has been the subject of an informal investigation by the FTC for the past two years.

Also in June, Intel was fined $25.4 million by South Korea's Fair Trade Commission for allegedly offering huge rebates to clients there for not using microprocessors made by rival Advanced Micro Devices Inc.

BY THE NUMBERS: Analysts polled by Thomson Financial expect Intel to report second-quarter income of 25 cents per share on revenue of $9.32 billion.

ANALYST TAKE: Friedman Billings Ramsey analyst Craig Berger expects Intel to report a solid quarter.

"Recent checks suggest second-quarter PC chip shipments were reasonably robust due to emerging market unit demand, new 'netbook' demand...and easy first-quarter comparisons," Berger wrote in a note to clients.

"Second-quarter gross margins should track near management's 56 percent guidance midpoint, as better-than-expected volume efficiencies are offset by inflationary pressures like higher gold and energy prices," he added.