Intel (NASDAQ: INTC) had a good quarter. The market did not agree. But operating income was up 105% to $3 billion on $10.7 billion in sales. Guidance for the current quarter was for revenue as high as $10 billion. Gross margins took a very big jump to 58%, indicating that a price war with Advanced Micro Devices (NYSE: AMD) may be behind the companies.

One of the things that management made clear on the earnings call (see the full transcript here) is that mobile chips are becoming a bigger portion of the company's business. That allows the firm to diversify away from PCs and servers and move into a fairly fast-growing part of the tech market. Sales of handset devices around the world are not showing any signs of slowing.

Management also pointed out that PC sales are expected to grow in the "low double digits" in 2008. From Intel's standpoint that is very good news. It is also an indication that its forecasts for 2008 are very conservative. If so, the sell-off in the company's stock may not have been justified.

The other critical point which management made is that the company is seeing rapid growth in emerging markets. Even if there is a slowdown in the US, this may well be offset by very strong results in Asia. Intel's sales in Europe were very strong in Q4. That could continue into next year.

A final note on the company's comments is that it sees itself being "on track to deliver that third billion dollars of overall structural and efficiency program spending" -- This is likely to allow the company to keep its gross margins close to 60%, and that is impressive.

Douglas A. McIntyre is an editor at 247wallst.com.