Tech industry insiders had been looking to Intel, the world's largest chipmaker, for a sign that the worst of the downturn may be past.

They aren't likely to be disappointed. Intel (NASDAQ: INTC) today reported first quarter net income of $647 million and earnings per share (EPS) of 11 cents on revenue of $7.1 billion. That revenue was slightly above the $7 billion in unofficial estimates, since the company gave no guidance after its disastrous fourth quarter in January.

Even more encouraging, Intel's president and CEO, Paul Otellini, seems finally ready to declare a bottom to the plunge that the industry took in the fourth quarter of 2008.

"We believe PC sales bottomed out during the first quarter and that the industry is returning to normal seasonal patterns," he said in a statement. "Intel has adapted well to the current economic environment and we're benefiting from disciplined execution and agility. We're delivering a product portfolio that meets the needs of the changing market, spanning affordable computing to high-performance, energy-efficient computing."

Microprocessor units were lower versus the fourth quarter, that's a typical seasonal pattern for Intel, although the fourth quarter of 2008 was off by 25 percent, when it should have been up. The good news is average selling prices (ASPs) were flat. ASPs had been on a downward slope for some time.

While netbooks have been the hot market and were believed to be the one bright spot in the market, revenue from the Atom microprocessors and chipsets was $219 million, down 27 percent sequentially.

The gross margin of 45.6 percent was much lower than 53.1 percent in the fourth quarter. This was due to higher factory underutilization charges and startup costs. Intel caught a break with inventory reduction of $700 million and much lower restructuring charges of just $74 million, instead of the expected $160 million.

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Intel declined to provide revenue outlook for the second quarter, citing economic uncertainty, but did say that for internal purposes, the company is currently planning for revenue approximately flat to the first quarter.