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Chip behemoth Intel (INTCFree Intel Stock Report) has reported fairly good news for the first quarter of this year. More specifically, earnings per share came in at $0.38, which was a penny better than we anticipated. Revenues were nearly $12.8 billion, which was on par with our target. Though not earth-shattering, these results were solid, given that the domestic economy is recovering only at a measured pace and the market for personal computers has been shrinking as consumers shift to tablets and smartphones. The news met a muted reaction on Wall Street, and the stock is little changed ahead of the bell.

What drove Intel's relatively solid showing? Revenues at the Internet of Things group climbed 32% relative to last year, to $482 million. Furthermore, Data Center revenues rose 11%, year over year, to $3.1 billion. What's more, the Software and Services segment posted a 6% gain from last year, to $553 million. These positives helped to offset a slight decline in the PC Client Group and a more pronounced decrease in the Mobile and Communications division. Management noted that it has seen some signs of improvement in the struggling personal computer market, along with some progress in the tablet processor segment. (The company shipped 5 million tablet processors in the quarter, while it looks to achieve its target of 40 million for the full year.)

Guidance for the June period is in line with our expectations. Management looks for revenues to be $13 billion, which matches our estimate, while the gross margin ought to come in at 63% plus or minus a couple of percentage points. For the full year, revenues are expected to be stable, on par with management's view three months ago, while the gross margin is likely to come in at about 61%. Based on this guidance, we have left our top- and bottom-line estimates unchanged for the full year at $53.1 billion and $1.85 a share, respectively.

It is no secret that Intel is the dominant company in the PC market. However, this segment is mature, and thus the company's growth must come from other areas. A short time back, Intel used its sizable cash hoard to purchase Internet security firm McAfee. While this helped to diversify the company's operations and provided a lift to share net, we feel the belle of the ball is the lucrative mobile market. Hence, we believe that Intel's focus will remain on garnering market share there in the years ahead. It should be noted that ARM Holdings has a commanding share of this market and Intel has its work cut out for it. We believe that the company will attempt to gain share through acquisitions and internal means. Its healthy balance sheet, with only moderate debt and ample cash on hand, gives it financial flexibility.

Intel remains a solid choice for long-term investors seeking a presence in the technology sector. True, it is no longer among the “high-flying” tech stocks that offer more alluring price appreciation prospects (albeit with added risk). The company can best be described as mature in nature. However, Intel stock does offer investors solid total return potential, particularly when adjusted for risk. What's more, its dividend yield, which is currently 3.5%, is above the Value Line median and stands out among its semiconductor peers (most of which don't offer a payout).

About The Company: Intel Corporation is a leading manufacturer of integrated circuits. In addition to primarily supplying manufacturers of personal computers, the company serves a multitude of other global markets, including communications, industrial automation, military, and other electronic equipment. Intel’s product line consists of microprocessors, with the Pentium series being the most notable. It also manufactures microcontrollers and memory chips, and the company sells computer modules and boards, and network products.

At the time of this article’s writing, the author did not have positions in any of the companies mentioned.