By Arun Kumar
Washington, April 15 (IANS) World’s largest chipmaker Intel Corp said its first-quarter profit dropped 55 percent amid a weak market for personal computers, but the firm still topped Wall Street’s forecasts for earnings and revenue as the PC market bottomed in February.

The Santa Clara, California-based company reported Tuesday its net income totalled $647 million, or 11 cents per share, for the three months ended March 28, compared with $1.44 billion, or 25 cents per share, in the year-earlier period.

A consensus estimate of analysts polled by Thomson Financial had forecast a profit of 3 cents per share, CNNMoney.com said. Sales fell 26 percent to $7.15 billion from $9.67 billion a year ago. Analysts were looking for $6.98 billion.

“Desktop computer sales hit bottom and have followed a more normal pattern since February,” chief executive Paul Otellini said in a conference call. Otellini noted the company’s “horrendous” fourth quarter, when profit fell 90 percent.

“We’re still in a fragile economic environment, but the past three months have improved our ability to look at the market now,” he said. “It’s given us the confidence to say we’ve seen the bottom.”

He expects a gradual recovering of demand and replenishing of stores’ inventories in the coming months.

Intel would not provide a formal outlook, but for internal purposes, the company predicted second-quarter revenue that will be flat compared with the first quarter, CNNMoney.com said.

Intel is a bellwether for the technology industry, as investors look to its results as a barometer of spending on personal computers and servers. When manufacturers buy more of Intel’s computer chips, it suggests they expect higher consumer demand.

Like many chipmakers, Intel has suffered from slumping PC sales in the economic downturn. Big technology stocks have stabilised somewhat in the first quarter of 2009.

Intel and rival Advanced Micro Devices provide most of the chips for standard personal computers, while Samsung and Texas Instruments have most of the market share for mobile-phone processors.