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Intel Shares Jump on Earnings Beat (Update 1)

Updated from 4:35 p.m. ET with CEO comments from conference call

NEW YORK ( TheStreet) -- Intel (INTC - Get Report) shares rose more than 2% to $26.17 in late trading Thursday after edging past Wall Street's expectations for its fourth-quarter results.

The world's biggest chip maker reported adjusted earnings climbed 21% over last year to 68 cents in the December-ended quarter. Revenue jumped 22% year-over-year to $13.9 billion.

Analysts were expecting Intel to report earnings of 61 cents a share on revenue of $13.7 billion. The company last month lowered its revenue guidance to $13.7 billion from $14.7 billion, citing a hard disk drive supply shortage resulting from floods in Thailand that disrupted the personal computer supply chain.

Intel's strong earnings come as the company is trying to move outside its core business into new areas amidst a sagging PC market.

Intel previewed some of its emerging strategy at CES last week where it showed off super thin and powerful laptops, dubbed Ultrabooks. The company expects more than 70 Ultrabooks to launch this spring, CEO Paul Otellini told analysts on the company's conference call.

"I haven't seen this level of excitement in the customer base since 2003," he said. "People are very excited about the feature set and having the PC reenergized."

However, it remains to be seen whether Ultrabooks will cannibalize notebook sales, as some analysts fear.

"I think initially this will be a replacement of existing notebook sales and people will trade up for it," he said.

As PCs become more sophisticated and begin to incorporate touch capabilities, "its hard to tell what the market impact is going to be," Otellini said. "No one knows how that plays out."

Otellini said the company's goal for this year is for Ultrabooks to comprise 40% of consumer notebooks.

Intel has also announced smartphone deals with Lenovo and Motorola Mobility (MMI) as the chipmaker tries to shift into powering mobile devices.

"We're coming in at the top of the smartphone market," Otellini said. "Our value proposition is aimed at best performance and a good feature set and good battery life."

The company's PC Client Group--which includes notebook and desktop devices--grew 17% year-over-year to $9 billion, allaying fears that sales of tablets like Apple's (AAPL) iPad have hurt sales of Intel products.

Looking forward into the first quarter of 2012, Intel expects revenue of $12.8 billion, in line with analyst estimates.

-- Written by Olivia Oran in New York.

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