Intel last night posted a 38 per cent fall in quarterly profit and cut its annual revenue forecast but said it had stopped losing market share to Advanced Micro Devices (AMD).
Intel's shares were up more than 1 per cent in after-hours trading following its first-quarter earnings report, which topped average Wall Street expectations by a penny.
The stock has fallen about 24 per cent in the past 12 months on investor concern Intel was losing clients to AMD, and analysts warned of more volatility ahead.
The world's top computer chip maker said first-quarter net income was $1.35 billion, or 23 cents per share, down from $2.18 billion, or 35 cents per share, a year earlier. Earnings beat the 22 cents forecast on average by analysts.
Intel, whose processors are found in about 90 per cent of personal computers, has been cutting prices to counter the growing challenge from AMD, whose products offer power usage and performance advantages.
Intel gave an optimistic outlook for the second half as it increases sales of new products, including its "Viiv" system for high-end home entertainment and notebook computers using high-powered dual-core processors.
California-based Intel in March surprised investors by lowering its first-quarter revenue forecast to $8.7 billion to $9.1 billion, citing weaker-than-expected demand and a decline in market share.