Today: Intel promotes from within for new CEO; LinkedIn, Gilead and SunPower report earnings. Also: S&P Nears 1,600 as Yelp soars to record highs.
The lead: Intel announces new leader on busy day for Silicon Valley earnings reports
Intel announced its new CEO Thursday, two weeks ahead of its annual shareholders meeting, where current CEO and President Paul Otellini will step down ahead of schedule. His replacement is well-known to Intel workers, as the company promoted from within, as it has done since the company began in 1968.
Chief Operating Officer Brian Krzanich won over the Intel board to take the top spot by teaming with a fellow competitor, software chief Renee James, who will take over Otellini's role as president. Andy Bryant, chairman of the Intel board, which made the decision, said that he and his colleagues were surprised that the two CEO candidates teamed up in such a manner, but the approach won them over.
"Brian and Renee delivered a strategy for Intel that is pretty dramatic," Bryant told The Wall Street Journal. "It's a foundational strategy that takes Intel into new markets in new ways."
Analysts weren't as convinced that the move would push Intel in a new direction, saying that the choice of Krzanich meant that Intel was more likely to keep on a steady course rather than pushing headfirst into mobile or other new ventures, despite a downturn in the semiconductor industry.
The choice "removes the risk of uncertainty of an outsider coming in and changing the strategy at the company. I think (Wall Street) will perceive it as Intel's strategy remaining consistent." RBC Capital Markets analyst Doug Freedman told Reuters.
Krzanich's engineering and manufacturing background in the company signals that Intel will flex its muscle in manufacturing, possibly moving deeper into contract fabrication for other companies, while James is expected to continue growing the Santa Clara company's software and services.
"They need to try to amplify that manufacturing advantage as much as they can. They don't have another edge." Evercore Partners analyst Patrick Wang told Bloomberg News, while analyst Jack Gold told The Mercury News that the selection of James as president "signals the board wants to make Intel a much broader company" with greater emphasis on making money from software and services.
Bryant said that despite another internal hire and the specialties of the two choices already residing within Intel's core competencies, change will come to the company.
"You'll see a fairly dramatic change over a period of time. If you look at Intel's past, with every CEO we've had that," the Intel chairman said. "(Andy) Grove replaced (Gordon) Moore and we got the PC. (Craig) Barrett replaced Grove and we got the communications, which is a foundation of the cellphones we have today. Otellini replaced Barrett -- servers didn't exist in those days, now we have the enterprise business, that's a 10-plus-billion-dollar business growing at double digits."
Intel gained 12 cents, or 0.5 percent, Thursday to close at $24.11.
-- LinkedIn, Gilead and SunPower report earnings: After the bell, three important Silicon Valley companies in vastly different fields took to the earnings podium with vastly different results on Wall Street.
LinkedIn reported strong profit and revenue growth in the first quarter, continuing its theme of growth from last year, but the company's projections for the current quarter came in lower than analysts expected, and the stock took a big hit after-hours.
LinkedIn stock surpassed $200 for the first time Thursday, establishing new intraday and closing highs, so the downturn likely reflects outsized expectations returning to earth, analysts said.
"The stock is somewhat a victim of its own success," Needham analyst Kerry Rice told Reuters. "They had a really big acceleration in Q4," said Rice. "So I think the market kind of expected similar results in Q1 and throughout 2013."
LinkedIn closed with a 3.5 percent gain Thursday at $201.67, but fell more than 10 percent to less than $180 in after-hours trading.
SunPower headed the other way even before trading ended for the day, as its earnings report leaked early and caused a spike in shares due to narrowing losses.
The San Jose solar concern increased revenues 29 percent from last year's first quarter and cut losses from 67 cents a share to 46 cents a share. The stock, which already had a big leap in the first quarter, shot up 17.6 percent to $15.29 at the end of the session and was roughly maintaining that level in late trading.
Gilead, meanwhile, stayed steady after announcing that its growth is continuing. The Foster City biotech giant, which is trading near record highs set earlier this year, announced an 11 percent gain in total revenues and a substantial leap in profits, from 28 cents a share in the same quarter a year ago to 43 cents a share this year.
Gilead stock shot 4.1 percent higher to $52.18 in regular trading, and saw no substantial movement in after-hours action following the report.
SV150 market report: Apple, Facebook and Yelp push tech stocks higher
Wall Street shot higher Thursday after economic reports showed an improving jobs situation a day before the United States is set to report on labor market growth in the month of April. Tech stocks were a big driver for the day's growth: The Standard & Poor's 500 tech sector helped push that index to yet more new highs, the Nasdaq's 1.3 percent growth led the three major U.S, indexes, and the SV150 index of Silicon Valley tech companies shot up 1.6 percent.
Wednesday's social-networking earnings reports helped the cause immensely, especially in the case of Yelp. The San Francisco customer-reviews site skyrocketed 27.4 percent to $32.22, establishing new intraday and closing highs despite continuing losses. Facebook also gained in the wake of an impressive earnings report, increasing 5.6 percent to $28.97 while announcing a new security feature and a system for tagging subjects in Instagram photos.
After a one-day bump in the road, Apple resumed its post-earnings rebound, gaining 1.4 percent to $445.52. Advanced Micro Devices continued a steep rise, gaining 5.9 percent to close at $3.41. Shares in AMD have now climbed 27.2 percent in the past three sessions combined, with The Wall Street Journal crediting takeover rumors with the sudden spike.
Yahoo gained 2.8 percent to $24.97 after yet another acquisition in the mobile sphere, Tesla increased 1.6 percent to $54.11 after CEO Elon Musk again tweeted about an upcoming announcement, and Google moved 1.1 percent higher to $829.61 after Chairman Eric Schmidt proclaimed that YouTube has already defeated the standard TV model.
Up: Yelp, SunPower, AMD, Facebook, Gilead, Splunk, LinkedIn, Yahoo, Applied Materials, eBay, Adobe, Palo Alto Networks, Cisco, Oracle, Tesla, Apple, Electronic Arts, VMware, Workday, Google
Down: SolarCity, Ruckus, NetApp, Juniper
The SV150 index of Silicon Valley's largest technology companies: Up 19.15, or 1.57 percent, to 1,236.01
The tech-heavy Nasdaq composite index: Up 41.49, or 1.26 percent, to 3,340.62
The broad Standard & Poor's 500 index: Up 14.89, or 0.94 percent, to 1,597.59
The blue-chip Dow Jones industrial average: Up 130.63, or 0.89 percent, to 14,831.58
Check in weekday afternoons for the 60-Second Business Break, a summary of news from Mercury News staff writers, The Associated Press, Bloomberg News and other wire services. Contact Jeremy C. Owens at 408-920-5876; follow him at Twitter.com/mercbizbreak.