Intel Corp forecast current-quarter revenue slightly below expectations but its gross margin outlook satisfied Wall Street, as the personal computer industry grapples with falling sales and a shift toward tablets and smartphones.
PC makers are struggling to stop a decline in sales as consumers hold off on buying new laptops in favor of spending on more nimble mobile gadgets.
Microsoft Corp's long-awaited launch of Windows 8 in October brought touchscreen features to laptops but failed to spark a resurgence in sales that Intel and many PC manufacturers had hoped for.
"The revenue isn't going to be there, but the margin and expense control is going to stabilize the bottom line," said Cody Acree, analyst at Williams Financial. "I think it's probably a success if you can be flat in an industry that most people expect to be flat-to-down."
Intel foresees first-quarter gross margins of 58 percent, plus or minus two percentage points. Analysts on average expected gross margins of about 56 percent for the current quarter, according to Thomson Reuters I/B/E/S
It estimated a 2013 gross margin of 60 percent, plus or minus a few percentage points. Analysts on average had expected 59 percent.
Intel projected capital spending in 2013 at $13 billion, plus or minus $500 million, exceeding what many analysts had expected.
In the fourth quarter, Intel's revenue was $13.5 billion, compared with $13.9 billion a year earlier. Analysts had expected $13.53 billion in revenue for the fourth quarter.
Intel estimated first-quarter revenue of $12.7 billion, plus or minus $500 million. Analysts expected $12.91 billion for the current quarter.
Net earnings in the December quarter were $2.5 billion, or 48 cents a share, compared with $3.4 billion, or 64 cents a share, in the same quarter last year.
Shares of Intel rose 1.85 percent in after hours trade, after closing up 2.58 percent at $22.68 on Nasdaq.
(Reporting by Noel Randewich; Editing by Richard Chang)