Intel Holds Up

Updated from April 17

Intel(INTC) reported flat first-quarter profit and revenue, as competition and tepid demand kept sales in check.

But the big chipmaker bumped up its profit margin outlook for the full year, offering the first modest piece of evidence that the turnaround plan undertaken by CEO Paul Otellini last year is starting to bear fruit.

"We are planning for growth in the second half of the year," Otellini told analysts in a post-earnings conference call Tuesday.

In early Wednesday trading, shares of Intel were up 29 cents, or 1.3%, to $21.25.

In the three months ended March 31, Intel said it recorded net income of $1.6 billion, or 27 cents a share, vs. $1.3 billion, or 23 cents a share at this time a year ago. But Intel said that $300 million, or 5 cents a share, resulted from a tax benefit.

Backing out the tax benefit, Intel's EPS was in line with Wall Street estimates.

Sales of $8.85 billion were just shy of the average analyst's expectation of $9 billion in revenue. At this time last year, Intel had sales of $8.94 billion.

According to Intel, total microprocessor-unit sales declined sequentially in the seasonally slow first quarter of the year, as did shipments of chipsets, flash memory and motherboards.