"We believe PC sales bottomed out during the first quarter and that the industry is returning to normal seasonal patterns," Paul Otellini, Intel's president and CEO, said in a statement.
The company did not provide guidance for future quarters, however, citing continued economic uncertainty.
Revenue for the quarter, ended March 28, was US$7.1 billion, down 26 percent from the first quarter of 2008 but still slightly ahead of analyst estimates, according to Thomson Reuters.
Net income was $647 million, down 55 percent year-over-year, with earnings per share of $0.11. That too was ahead of expectations; analysts had predicted earnings of just $0.03 per share. Intel said some restructuring and asset impairment charges had been lower than expected.
After riding a surge in popularity of netbooks, Intel saw revenue from its Atom microprocessors and chipsets drop sequentially. Atom sales fell 27 percent during the quarter to $219 million, Intel said.
Intel has adapted well to the recession, according to Otellini, through "disciplined execution and agility." It launched new Nehalem server chips during the quarter, as well as new Atom chips, and revised its manufacturing road map with a faster shift to 32-nanometer production.
The server chip launch was significant as it was the single largest increase in server performance that Intel has delivered, Otellini said. Over 230 server designs from server makers are now ready to ship, he said. Intel expects to ship its 1 millionth chip based on the Nehalem microarchecture this week, which includes the Core i7 and Xeon 5500 Nehalem chips.