NEW YORK (Reuters) - Intel Corp's strong quarterly report failed to lift its shares on Friday, as some investors, remembering the company's reversal of a bullish outlook a year ago, questioned its forecast.
While Intel posted better-than expected revenue and margins for the fourth quarter and gave a rosy outlook for early 2011, Ashok Kumar, an analyst at Rodman & Renshaw, said the market was skeptical after the company followed an upbeat outlook with a weak sales forecast in the third quarter last year.
"The problem is, Intel's forecasting ability is no better than a coin toss," he said, while maintaining an "outperform" rating on the shares.
"Last year, when the Street was skeptical about the second half, the company gave a very bullish guidance and a few weeks later they negatively pre-announced. So people take Intel's forecasts with a bucket of salt."
He and other analysts also cited lingering concerns about the company's minor role in the fast-growing market for smartphones and tablet computers.
Intel shares were down 0.8 percent at $21.12 in late morning on the Nasdaq, although shares of other semiconductor-related companies were up.
Intel is the first major technology company to report its fourth-quarter results. (Graphic: Intel's 4th-qtr earnings and forecast: http://r.reuters.com/tun36r )
Overseas investors also appeared to believe Intel's report boded well for the overall industry, with British chip designer ARM up 6.7 percent at a 10-year high and Japan's Tokyo Electron rose 3.2 percent. Dutch semiconductor equipment vendors ASML and ASMI rose 6.3 percent and 5.3 percent, respectively.