Analysts surveyed by Thomson Reuters expected Intel (INTC) to report revenue of $7.3 billion and a profit of eight cents per share. Instead the company reported revenue of $8 billion and non-GAAP profits of 18 cents (PDF). And it predicted third-quarter revenue above Wall Street’s expectations.

In a statement, CEO Paul Otellini said the results “reflect improving conditions in the PC market segment with our strongest first- to second-quarter growth since 1988 and a clear expectation for a seasonally stronger second half.”

Now admittedly, Intel did post earnings of 28 cents a share in the same period last year. So its fortunes clearly declined in the months that followed. That said, the company appears to be on the rebound after hitting the bottom Otellini declared back in April.

“Basically, very strong numbers for the quarter and guidance is in line with seasonal trends,” Collins Stewart analyst Ashok Kumar told Reuters.” It’s an extremely strong number given the macro economic backdrop. Despite those headwinds, the company delivered significant upside to both guidance as well as as expectations. The big unknown is whether it’s anything more than inventory replenishment.”

Intel shares are on the upswing on the news.

Analysts surveyed by Thomson Reuters expected Intel (INTC) to report revenue of $7.3 billion and a profit of eight cents per share. Instead the company reported revenue of $8 billion and non-GAAP profits of 18 cents (PDF). And it predicted third-quarter revenue above Wall Street’s expectations.

In a statement, CEO Paul Otellini said the results “reflect improving conditions in the PC market segment with our strongest first- to second-quarter growth since 1988 and a clear expectation for a seasonally stronger second half.”

Now admittedly, Intel did post earnings of 28 cents a share in the same period last year. So its fortunes clearly declined in the months that followed. That said, the company appears to be on the rebound after hitting the bottom Otellini declared back in April.

“Basically, very strong numbers for the quarter and guidance is in line with seasonal trends,” Collins Stewart analyst Ashok Kumar told Reuters.” It’s an extremely strong number given the macro economic backdrop. Despite those headwinds, the company delivered significant upside to both guidance as well as as expectations. The big unknown is whether it’s anything more than inventory replenishment.”

Intel shares are on the upswing on the news.

Well, here’s what we know so far. California’s overall employment rate hit 8.2 percent in October, up from 7.7 percent in September, to the highest level since September 1994. Now, that’s not just the tech industry hurting: the construction industry in the state has lost 69,500 jobs this year, for instance. In Santa Clara County, the jobless rate stands at 6.9 percent; San Francisco is lower, at 6 percent, while San Matero County, home to venture capital’s Sand Hill Road, is down at 5.4 percent. Slightly worse off are the East Bay counties of Alameda, at 7.1 percent, and Contra Costa, at 7 percent. The national jobless rate stood at 6.5 percent in October.

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We’re assuming more of the same … deterioration in the economic markets,” Xerox CEO Anne Mulcahy said on a conference call with analysts. “That’s why we’re being so aggressive in terms of the cost reductions, so we can be assured of delivering the earnings growth that we expect in 2009.”

[Image Credit: The Great Copy Machine Epidemic]

In a Tuesday interview with Reuters, Ballmer said it’s reasonable to assume that the ongoing financial crisis will affect Microsoft (MSFT). “Financial issues are going to affect both business spending and consumer spending, and particularly … spending by the financial services industry,” Ballmer said. “We have a lot of business with the corporate sector as well as with the consumer sector and whatever happens economically will certainly affect Microsoft. I think one has to anticipate that no company is immune to these issues.”

Our industry is not immune to what goes on in the global economy. And yet as I travel, given the current circumstances, people still see a certain buoyancy in the market.”

– Microsoft CEO Steve Ballmer, Sept. 26, 2008

Wall Street’s 777-point selloff Monday–one of its worst days since 1929–hit many tech stocks harder even than the overall market on Monday. Said Ross Sandler, senior Internet analyst at RBC Capital Markets, “Tech took it on the chin disproportionately.”

Indeed, it did. And a couple of other places as well, from the looks of things.

A quick overview of the carnage:

• Amazon (AMZN) fell 10 percent to $63.35
• Apple (AAPL) fell 17.9 percent to $105.26
• Cisco (CSCO fell 8.5 percent to $21.79
• Comcast (CMCSA) fell 13 percent to $18.01
• Dell (DELL) fell 9.4 percent to $15.41, a new 10-year low
• eBay (EBAY) fell 12 percent to $19.95
• Google (GOOG) fell 12 percent to $381.00, a new 2-year low
• Intel (INTC) fell 10.1 percent to $17.27, a new 2-year low
• Microsoft (MSFT) fell 8.7 percent to $25.01
• Oracle (ORCL) fell 9 percent to $18.77
• Qualcomm (QCOM) fell 13 percent to $39.88
• Research In Motion (RIMM) fell 12.8 percent to $61.73
• Sirius XM (SIRI) fell 18 percent to $0.62
• Sun (JAVA) fell 11.7 percent to $6.75, a new 13-year low
• Yahoo (YHOO) fell 10.8 percent, to $16.88, a new 5-year low

Seems the tech industry “buoyancy” to which Microsoft CEO Steve Ballmer referred last week was more of a noneffervescence. Certainly, that’s the impression one gets from reading the statement Microsoft just issued calling on Congress to revisit its vote against the financial bailout plan. “Microsoft strongly urges members of the U.S. House of Representatives to reconsider and to support legislation that will re-instill confidence and stability in the financial markets,” General Counsel Brad Smith said in a statement. “This legislation is vitally important to the health and preservation of jobs in all sectors of the economy of Washington State and the nation, and we urge Congress to act swiftly.”

What was that you were saying about “buoyancy” again, Steve?

Still, to be fair, the tech sector does appear to be gaining some ground in early trading today. The tech-heavy Nasdaq rose 2 percent to 2,027, reclaiming some of Monday’s ugly 9 percent loss. Apple shares are up 2.7 percent at $106.70 as I write this. Google shares are up 4.5 percent at $398.06. Microsoft is up 2.5 percent at $25.63. Even Yahoo is on an upward track, up 2.43 percent at $17.29.

But over the last several weeks, the dollar has reversed course, and strengthened against the Euro and the yen. And that poses some noteworthy issues for tech industry earnings in the next few quarters.

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