Updated from 9:36 a.m. EDT

Shares of chip giant Intel ( INTC) slipped in trading Wednesday as investors digested the company's first-quarter results and vague second-quarter outlook.

The company's shares were recently down 54 cents, or 3.4%, to $15.47, underlining the uncertainty that still clouds tech sector stocks.

Intel offered up some hints of a turnaround when it released its results late Tuesday, but it was unwilling to provide second-quarter revenue guidance, citing the challenges of a tough economy.

Internally, however, the company is forecasting second-quarter revenue at a similar level to the first quarter. The chip manufacturer has also seen some changes in the PC market, which may now be emerging from its recent slump.

"We saw a few important trends play out this quarter," said Intel CEO Paul Otellini during a conference call late Tuesday. "We are seeing signs that a bottom in the PC market segment has been reached."

Desktop sales hit the bottom first and have followed more normal patterns since early February, according to the CEO. Notebook supply chains and inventory levels have also returned to normal levels, he added.

Despite beating the Street's estimates, the tech bellwether saw its profits tumble during the first quarter.

Intel reported revenue of $7.1 billion, down from $9.7 billion in the same period last year, but above analyst estimates of $6.98 billion. The Santa Clara, Calif.-based firm's earnings were 11 cents a share on net income of $647 million, compared to 25 cents and net income of $1.4 billion in the year-ago quarter. Analysts had expected the chip manufacturer to earn 3 cents a share.

At least one analyst warned that Intel's talk of a tech sector turnaround may be premature.

"We recommend investors sell shares as Intel is likely to experience multiple compression," wrote Adam Benjamin, an analyst at Jefferies & Company, in a note released Wednesday. The analyst cited a number of factors working against Intel, including ongoing declines in the desktop market, slowing laptop growth and disappointing efforts in new markets.

Investors were eagerly awaiting Intel's results for an insight into the the health of the tech sector.

Both Intel's enterprise and mobility groups experienced sequential and year-over-year revenue declines during the first quarter. It was a similar story geographically, although Europe, Japan and emerging markets were weaker than the U.S. and China.

Undeterred, Otellini said that his company is doing all the right things in a tough spending climate.

"While the global economy continues to be weak and uncertain, our execution this quarter was outstanding," he said. "We have adjusted quickly to this new environment where demand remains difficult to predict and order lead times have contracted."

Like most tech firms, Intel has felt the effects of the global spending slowdown, but the company says that it is on track to reduce its spending by $700 million in 2009. Intel also has 1,400 fewer employees than it did during the fourth quarter, according to Otellini.

The company, which competes with AMD ( AMD) and Texas Instruments ( TXN) exited the first quarter with $10.3 billion in cash and investments, although this is $1.2 billion less than the prior quarter.

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