Intel: At Least It's Not AMD

Crumpled profit margins and stagnant sales don't generally denote a thriving enterprise.

But Intel's(INTC Quote) financial performance might not look so ugly when the chipmaker delivers its first-quarter results Tuesday, thanks to the jaw-dropping travails of its main competitor.

Last week, Advanced Micro Devices(AMD Quote) warned the Street that its sales would be a whopping $475 million less than the high end of its initial estimate, as unit sales and average selling prices declined sequentially.

Compared with such a massive revenue miss, Intel's problems seem less glaring: Intel's business may be under pressure, but at least the company appears to have a solid grasp of the demand for its products.

For nearly a year, the Santa Clara, Calif., company has been in fix-it mode. In June, Intel began a restructuring effort that cut its employee numbers by 10% and should save billions of dollars in operating expenses.

And the company has shed distractions such as its cell phone communications and application processors business, which it sold to Marvell Technology(MRVL Quote) for $600 million last year.

Most important, Intel has regained the technology edge in the market for PC and server microprocessors. The company refreshed its entire line of microprocessors in the summer of 2006 and has beaten AMD to the punch in releasing quad-core chips.

Though AMD has eaten into Intel's market share, taking 25% of the total microprocessor market in the fourth quarter attributable to deals with PC makers such as Dell(DELL Quote), some analyst and investors believe that the tide is set to turn back in Intel's favor.