Intel Corp. (NASDAQ: INTC) is out with its fourth-quarter earnings of 2013, and the good news is that there does appear to be some stabilization in the core PC market. The bad news is that after two analyst upgrades we have seen profit taking ahead of and after the news.

Intel reported earnings of $0.51 per share, and revenue was $13.8 billion. Thomson Reuters had estimates of $0.52 per share and $13.72 billion in revenue. Gross margin was 62% in the fourth quarter.

Guidance was offered up at $12.8 billion for the current quarter, plus or minus the usual $500 million. Thomson Reuters has estimates at $12.79 billion. Intel also targeted 59% margins, plus or minus a couple of points.

For the full 2014 outlook, Intel is targeting for sales to be flat (around $52.7 billion versus $53.2 billion consensus) and margins to be 60% plus or minus a few points. Capital spending was targeted at $11 billion, plus or minus about $500 million.

Fourth quarter highlights were as follows:

• PC Client Group revenue of $8.6 billion, up 2% sequentially and flat year-over-year.
• Data Center Group revenue of $3.0 billion, up 3% sequentially and up 8% year-over-year.
• Other Intel architecture operating segments revenue of $1.1 billion, up 4% sequentially and up 9% year-over-year.
• R&D plus MG&A spending of $4.8 billion, slightly above the company’s prior expectation of approximately $4.7 billion.
• Tax rate of 26% versus the company’s prior expectation of 25%.

The annual PC client group revenue was down 4% at $33.0 billion. Still, the quarterly PC client group was flat year over year. Intel’s CEO Brian Krzanich said:

We had a solid fourth quarter with signs of stabilization in the PC segment and financial growth from a year ago. We’ve built a strong foundation for our business by bringing innovation to the market more quickly across a wide range of computing platforms. For example, at CES, we demonstrated multiple devices that weren’t on our roadmap six months ago.

Intel had seen two analyst upgrades right before the report. Now we are seeing profit taking and investors exiting the stock. Intel shares closed down 0.5% at $26.54 and the stock was down another 2.25 or so at $25.95 in the after-hours session. Intel recently hit a 52-week high of $27.12.

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