updated 4/18/2007 5:49:58 PM ET 2007-04-18T21:49:58

Benefiting from its rapid shift to a new chip-making process and a big tax benefit, Intel Corp.'s first-quarter profit surged 19 percent as lower production costs helped the company withstand another round in a fierce price battle with rival Advanced Micro Devices Inc.

Intel said after the market closed Tuesday that it earned $1.61 billion, or 27 cents per share, in the first three months of the year. That compares with net income of $1.36 billion, or 23 cents per share, in the same quarter last year.

The Santa Clara-based company said the latest profits include $300 million reversal of previously accrued taxes that were added back into the company's coffers. It increased the earnings per share by about 5 cents.

Intel said revenues for the quarter were $8.85 billion, down slightly from last year's $8.94 billion

Analysts surveyed by Thomson Financial were expecting the company to earn, on average, 22 cents per share on nearly $9 billion in revenue.

Intel shares gained 29 cents, or 1.4 percent, to close at $20.98 on the Nasdaq Stock Market. In extended-session trading, they gained 30 cents.

Copyright 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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