Intel Inches Up Despite Profit Plunge

"We believe that the shift to 32-nanometers will increase our performance lead, lower our product costs, and usher in a new era of high-volume System-on-Chip products," he said.

System-on-Chip technology, which combines different computer components onto a single piece of silicon, is found in a range of products, including mobile Internet devices, media servers, and point-of-sale terminals.

The tech bellwether, which is feeling the effects of the weakening PC market, also met analysts' fourth-quarter earnings and revenue estimates after recent downward revisions of its guidance.

For the fourth quarter, Intel posted revenue of $8.2 billion, a 27% drop from $10.7 billion in the year-ago quarter.

Intel, which did not offer formal revenue and earnings guidance during its conference call, said that for internal purposes, it expects first-quarter sales of approximately $7 billion. Analysts had estimated revenue of $7.28 billion and earnings of 12 cents a share.

Jefferies & Company analyst Adam Benjamin, however, recommended investors sell Intel shares in a note released Friday.

"Intel is likely to experience multiple compression as the PC market slows due to desktop declines and slowing laptop growth," he wrote, adding that a mix-shift in the low-end of the market will also pressure Intel's prices.

Goldman lowered its Intel price target to $12 from $14 Friday due to the company's weakening earnings trends, but maintained its neutral rating on the Santa Clara, Calif.-based firm.

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