What’s AHEAD for Intel and Yahoo After Earnings BEATS?

Both Yahoo (NASDAQ:YHOO) and Intel (NASDAQ:INTC) beat estimates with their quarterly earnings reports on Tuesday, but face different kinds of challenges in the second half of the year. Yahoo’s earnings beat will undoubtedly give confidence to new chief executive Marissa Mayer, but investors are looking at her to further boost revenue as rivals Facebook (NASDAQ:FB) and Google (NASDAQ:GOOG) become stronger.

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Intel, the world’s largest semiconductor maker, also had good news on the day, but was forced to forecast third-quarter sales lower than some analysts had estimated. Intel is getting hurt by the economic slowdown in China, now the largest computer market, as well as the increasing pressure on PC sales from tablets.

For Yahoo (NASDAQ:YHOO), second-quarter earnings, excluding some items, were 27 cents a share, beating the 23 cent average estimate. Net income attributable to the company fell to $226.6 million, or 18 cents a share, from $237 million, or 18 cents, a year earlier. Yahoo’s overall sales tumbled 21 percent to $4.98 billion last year as users devoted less time on the service.

“Non-GAAP earnings per share exceeded consensus and both display and search revenue ex-TAC showed modest growth,” chief financial officer Tim Morse said in a statement. “We also moved aggressively with new strategic agreements with Alibaba and Facebook and announced several new partnerships.”

Mayer is the company’s fifth CEO in three years and took over from Ross Levinsohn, who ran Yahoo on an interim basis after Scott Thompson resigned in May over apparent inaccuracies in his resume.

Yahoo (NASDAQ:YHOO) edged lower 0.32 percent, or 5 cents, to be at $15.55 after hours.

Intel (NASDAQ:INTC) said net income for the second quarter was $2.83 billion, or 54 cents a share, compared with $2.95 billion, or 54 cents, a year earlier. Sales rose 3.6 percent to $13.5 billion. Analysts had projected profit of 52 cents a share on sales of $13.5 billion. However, the company said revenue in the current period will be $14.3 billion, plus or minus $500 million, below analyst projections of $14.6 billion.

Intel (NASDAQ:INTC) had long maintained that demand outside the U.S. and Europe, especially in China, would drive sales of PCs as more consumers in developing nations buy their first computers. However, the company’s forecast today adds to the concern that even sales expansion in China may not be enough to counter the falling demands elsewhere. Last week, Intel rival AMD (NYSE:AMD) had announced an unexpected 11 percent drop in second-quarter revenue, blaming the weakness in China and Europe for it.

Intel (NASDAQ:INTC) was down 0.99 percent, or 25 cents, at $25.13 in after-hours trading.

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