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Intel, a bellwether for the bleak first quarter earnings season and the whole tech industry, may have just thrown a life jacket to sinking tech stocks.

The world’s biggest chip maker reported that its first-quarter net income fell 55 percent from the first quarter a year ago. But the net income of $647 million, or 11 cents a share, wasn’t nearly as bad as analysts had feared.

Paul Otellini, chief executive of the company, said in a statement that the PC industry found its bottom in the first quarter and that the industry is “returning to normal seasonal industry patterns.”

For its own internal planning, Intel is counting on revenues being flat in the second quarter that ends June 30. Intel had few other changes to its plans and financial outlook.

That should be a relief to those who feared more economic catastrophe. Revenue for the quarter was $7.1 billion, better than the $6.97 billion analysts expected but down 26 percent from $9.6 billion a year ago when Intel posted net income of $1.6 billion, or 25 cents a share.

This quarter, the Santa Clara, Calif.-based company is the first to report earnings for the first quarter, which was likely one of the worst in history. Everyone is looking for signs of whether there’s more misery in store or some light at the end of the tunnel.

Analysts expected Intel to post earnings of $157 million, or 2 cents a share, on revenue of $6.97 billion. In the fourth quarter of 2008, Intel reported a net income of $234 million, or 4 cents a share, on revenue of $8.2 billion.

At the tail end of the first quarter, Intel fired off a major volley with the launch of its Xeon Series 5500 microprocessors for servers in corporate data centers. (pictured right)

Intel has taken a pounding in the stock market. Its 52-week peak was $25.29 a share. But its market capitalization of about $89 billion still dwarfs the $2.3 billion for rival Advanced Micro Devices. Intel plans to spend about $5.4 billion on research and development in 2009. Read the rest of this entry »