Intel announced Q1 revenues of $8.9 billion, down 1 percent year-over-year and down 9 percent from Q4 2006 revenues.

The company posted Q1 operating income of $1.7 billion, down 3 percent from the same quarter in 2006 but up 13 percent from Q4. Particularly strong was Intel's Q1 net income at $1.6 billion, up 19 percent from Q1 2006 and up 7 percent from Q4 2006.

Intel also reported earnings per share (EPS) of 27 cents, up 17 percent year-over-year and up 4 percent sequentially. The company said that its results included the effect of a $300-million reversal of previously accrued taxes that increased EPS by approximately 5 cents. Q1 gross margin was 51 percent, down from Q1 2006's 55.1 percent and down from Q4's 61.8 percent.

"The strong momentum of our industry-leading Intel Core microarchitecture product
family, combined with ongoing structural cost improvements, delivered solid financial results in Q1," Intel President and CEO Paul Otellini said in a statement. "Our product strength is reflected in the fact that average selling prices for the quarter held up well in a very competitive environment."

Looking ahead, Intel said it expects Q2 revenue to be down between $8.2 billion and $8.8 billion, and forecasted a drop in gross margin to 48 percent plus or minus a couple of points. For the full year 2007, the company said it expects gross margins of 51 percent plus or minus a few points, higher than its previous expectation of 50 percent plus or minus a few points.

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