Intel posted earnings per share of 59 cents.
Analysts polled by Thomson Reuters had forecast earnings of 53 cents per share.
Revenue for the Santa Clara, California, company rose 8% over the previous year to $11.5 billion, (€8.6bn) topping analysts’ forecasts of $11.37bn.
“2010 was the best year in Intel’s history.
“We believe that 2011 will be even better,” Paul Otellini, Intel president and chief executive, said in a written statement.
Revenue from Intel’s closely-watched Atom microprocessor and PC group was flat compared to the prior quarter, while its data centre group posted a 15% increase in revenue.
Meanwhile, the company’s gross margin was 67.5%, above expectations and slightly improved from last quarter’s 67%.
The strong quarterly results pushed Intel to new full-year highs as well.
Revenue of $43.6bn, operating income of $15.9bn, net income of $11.7bn and earnings per share of $2.05 all set records.
Intel is a closely watched bellwether by analysts.
A strong showing by Intel tends to indicate increased demand for tech spending by consumers and businesses — a sign that the economy is improving.
On Monday, Intel announced a $1.5bn, six-year agreement with graphics chip-maker Nvidia that will allow Intel access to patents for graphics chips.