Intel posted higher quarterly profit in line with analyst expectations, while a top official told CNBC that the microchip company is reclaiming market share from rival Advanced Micro Devices.
In an interview with CNBC's Jim Goldman, Chief Financial Officer Andy Bryant said gross margins should rebound up to the mid-50s in the second half of the year.
"We'll see revenue strengthen in the second half, new products that give us a performance advantage, and you'll see margins start to recover," Bryant told CNBC. "I'm guessing margins in the back half of the year will be in the low 50s and maybe approaching the mid 50s."
Still, Intel, which makes processors for about three-quarters of the world's computers, issued a second-quarter revenue outlook that was below analyst expectations.
Intel said that first-quarter net profit was $1.6 billion, or 27 cents per share, compared to $1.36 billion, or 23 cents per share, a year earlier. It said the profit included a tax
item that boosted earnings per share by about 5 cents.
Revenue fell less than 1% to $8.85 billion.
Intel was expected to have earned $1.28 billion, or 22 cents per share, on revenue of $8.96 billion, according to the average forecast of Wall Street analysts. That estimate includes $50 million in restructuring costs but not the tax item that boosted earnings.
Intel said second-quarter revenue would be between $8.2 billion and $8.8 billion, below the $8.86 billion that was the average forecast.
Intel has been locked in a price war with its smaller rival AMD , which said last week that quarterly sales would be about 20% below expectations due to falling prices and lower unit shipments.
In terms of market share, Bryant said "our guess is that it's positive for Intel (in relation to AMD) but we'd like to see official confirmation."
"It's clear that we absolutely slipped a little bit last year, and we recovered, and we're going to continue to drive technology in the marketplace," he added.
Intel said gross margin in the first quarter was 50.1%, which came in above its target of 49%, as lower unit costs and the sale of inventory more than offset the higher costs stemming from upgrading its manufacturing technology.
Second-quarter margin would be about 48%, but the company said it expected margins for the full year to be about 51%, ahead of the previous estimate of 50%.
Intel overhauled its entire line of processors last year in an effort to stop or reverse big market-share gains by AMD, whose chips were widely considered to be more powerful and
Shares in Intel rose about 2% in after-hours trading following the earnings release and conference call with analysts. Over the past year, Intel's shares have gained 9% while AMD's have fallen 56%.