Semiconductor industry leader Intel (INTCFree Intel Stock Report) reported somewhat mixed results during its fourth-quarter conference call. On a positive note, revenues and earnings per share came in higher than in the fourth quarter of 2012 at $13.8 billion and $0.51, respectively. For the full year, share net was $1.89 on revenues of $52.7 billion. Though both figures for the full year represented a year-over-year decline, it wasn't bad, considering that the global economy remained in just a gradual recovery mode, with pockets of weakness continuing in some regions.

Year-over-year segment comparisons were generally favorable for the December period. Data Center Group revenue climbed 8% over the prior-year tally, while Other Intel Architecture increased 9%. PC Client Group comparisons were roughly flat relative to 2012's period. Furthermore, the gross margin came in at 62%, which was 4% above 2012's figure, and 100 basis points higher than the midpoint of management's guidance. Operating income was also positive, climbing low double digits for the quarter.

However, the outlook for the year just begun was less than exciting. Management suggested that revenues would be about flat in 2014, while gross margin guidance, at roughly 60%, is only a slight increase over 2013's 59.8% tally. Given these variables, we have kept our 2014 share-earnings estimate stable, at $1.90, but pared our top-line forecast from $53.2 billion, to $52.8 billion.

What are the factors that we believe are influencing Intel's short-term results? First, it appears that while the domestic economy is on the mend, improvement will probably continue to be gradual in the year ahead. Things look quite the same internationally, with some regions still struggling to gain traction. What's more, the personal computer market continues to sputter, which remains Intel's bread-and-butter division. According to industry sources, PC shipments declined for the seventh consecutive quarter in the December period. Meanwhile, shipments of tablets exceeded personal computers for the first time in the December period, a few years earlier than many had expected. However, all news was not that bad for personal computers. For the full year, shipments of PCs declined 10% from 2012. However, during the fourth quarter, the rate of descent was 5.5%. This may be a sign that things are stabilizing. All told, consumer demand continues to wane, while things look a bit brighter on the commercial side of the ledger.

We believe that good-yielding Intel stock remains a solid core holding for those seeking a presence in the technology sector. The share price increased in the days leading up to its fourth-quarter earnings release, but gave back some of that ground after the announcement. We believe this reflected some profit taking, along with some disappointment related to its 2014 outlook. That said, we think Intel stock offers solid risk-adjusted total return potential at the recent multiple. Intel has a commanding presence in the mature personal computer market. Though this segment might well continue to struggle in the years ahead, it appears that the company will use its financial muscle to boost its presence in the lucrative mobile and tablet space.

About The Company: Intel Corporation is a leading manufacturer of integrated circuits. In addition to primarily supplying manufacturers of personal computers, the company serves a multitude of other global markets, including communications, industrial automation, military, and other electronic equipment. Intel’s product line consists of microprocessors, with the Pentium series being the most notable. It also manufactures microcontrollers and memory chips, and the company sells computer modules and boards, and network products.

At the time of this article’s writing, the author did not have positions in any of the companies mentioned.