Intel Corp. (NASDAQ:INTC), the No. 1 chipmaker, reported fourth-quarter earnings that narrowly exceeded analysts’ diminished estimates after a period in which PC sales slumped due to lack of demand. Net income plunged 27 percent, while revenue dropped only 3 percent.

The Santa Clara, Calif., semiconductor giant reported fourth-quarter net income of $2.5 billion, or 48 cents per share, on revenue of $13.47 billion, compared with prior-year net income of $3.36 billion, or 64 cents per share, on revenue of $13.88 billion. Both earnings beat estimates by 3 cents, but revenue was below estimates by about $300 million.

Full-year net income fell to $11 billion, or $2.13 per share, on revenue of $53.3 billion, compared with 2011’s net income of $12.94 billion, or $2.39 per share, on revenue of $53.99 billion.

Intel
Intel reported fourth-quarter net income dipped 27 percent -- the worst report in the past four years. Photo: Reuters

“The fourth quarter played out largely as expected as we continued to execute through a challenging environment,”  Paul Otellini, Intel CEO, who plans to retire in May, said. A successor has not yet been named.

Looking ahead, Intel expects 2013 sales to rise only "in the slow single digits," with first-quarter revenue around $12.7 billion, plus or minus $500 million -- an indication of slow demand.

Continue Reading Below

The Intel report is the first major technology bellwether of the 2013 earnings season. It follows reports by market researchers IDC and Gartner (NYSE:IT) that PC sales fell last year and the Semiconductor Industry Associations’s predictions that full-year sales of chips eased slightly.

Shares of Intel closed at $22.68, up 57 cents in Thursday trading. Including dividends, they’ve fallen about 7 percent in the past year. They fell 3 cents in after-hours trading.