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fourth quarter wasn't as bad as feared, as the world's largest chipmaker exceeded analysts' estimates. The quality of the earnings beat however, is a different story.

The Santa Clara, Calif.-based company reported earnings of 48 cents a share on $13.5 billion in revenue. Gross margins, an important metric for Intel, came in at 58%, 100 basis points better than the company was expecting.

Analysts surveyed by

Thomson Reuters

were looking for Intel to report earnings of 45 cents a share on $13.53 billion in revenue.

Aiding the report was a lower-than-expected tax rate, which helped lift earnings. The company's tax rate during the quarter was 23%, well below the expected tax rate of 27%.

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"The fourth quarter played out largely as expected as we continued to execute through a challenging environment," said Intel CEO Paul Otellini, in a statement. "We made tremendous progress across the business in 2012 as we entered the market for smartphones and tablets, worked with our partners to reinvent the PC, and drove continued innovation and growth in the data center. As we enter 2013, our strong product pipeline has us well positioned to bring a new wave of Intel innovations across the spectrum of computing."

Intel's first quarter and full year 2013 guidance, however, were weaker than Wall Street's looking for. For the first quarter, the No.1 chip maker expects revenue of $12.7 billion, plus or minus $500 million. Gross margin is expected to be 58%, plus or minus a few hundred basis points. Analysts polled by

Thomson Reuters

expect $12.9 billion in sales and earnings of 39 cents a share.

For the full year, Intel is expecting a low single-digit percentage increase for revenue, and gross margins are expected to be around 60%.

Shares of Intel closed the regular session higher, gaining 2.58% to finish at $22.68. The stock is moving lower in extended-hours trading, falling 5.16% to trade at $21.51.

-- Written by Chris Ciaccia in New York

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