Intel Corporation (NASDAQ:INTC) is scheduled to release its next earnings report today after closing bell. Analysts at RBC Capital Markets aren’t expecting any big surprises in those results. In a report dated April 13, 2014, analysts Doug Freedman and Earl Hege call this year “uninspiring” and said they expect in-line results for the March quarter but see “wiggle room” on operating expenditures and gross margins.

Intel Corporation

Possible upside for Intel, but…

They maintained their Sector Perform rating and $26 per share price target for Intel Corporation (NASDAQ:INTC). The midpoint of the guidance Intel provided is revenue of $12.8 billion, gross margins of 59% and operating expenditures of $4.8 billion. The RBC team is projecting $12.85 billion in revenue, gross margins of 59.2% and $4.8 billion in operating expenditures.

They believe Intel Corporation (NASDAQ:INTC)’s guided midpoint is implied to be around 36 cents per share, which is just slightly below consensus estimates of 37 cents per share. They think upside could be possible because of gross margins though because management has been working on controlling the allocation of “startup charges” and operating expenditures.

Looking ahead to June

The RBC team believes Intel Corporation (NASDAQ:INTC) could guide for a June quarter that’s slightly above its 10-year seasonal average of a .8% gain. They say the main driver of this will likely be the enterprise refresh cycle and stabilizing trends in the PC market. They’re expecting June quarter revenue of $12.92 billion, gross margins of 59.2% and earnings per share of 44 cents.

They note that Gartner data on PCs for the first quarter of the year suggests that they may be stabilizing. As a result, they adjusted their PC unit estimate slightly higher, bumping it from 75.4 million to 76.4 million. For the full year, they’re now estimating 307 million PC units, a slight increase from their previous estimate of 304 million. However, they aren’t moving Intel Corporation (NASDAQ:INTC)’s estimates until they see “clarity” regarding the mix-shift of the company’s products.

Where Intel could do better

The RBC Capital analysts continue to see Intel Corporation (NASDAQ:INTC) as being in transition. They see growing into new markets as “mission critical” and believe return on investment and earnings per share leverage will continue being a challenge for Intel over the next six to nine months.

They believe Intel Corporation (NASDAQ:INTC) is “unwisely chasing / spending aggressively” in mobile, which they believe will just drag on the company’s operating margins for some time. They are wondering why the company isn’t moving toward embracing ARM-core processors because its “leading-edge process is falling short of ARM-ecosystem.” They also question the return on investment for Intel’s ramp-up of mobile rather than using low-cost debt to buy a successful player in the market.