Yesterday evening, Intel[NASDAQ:INTC] announced their quarterly earnings for 1Q 2011 or Q1 2011. Their announcement brought upon yet another record quarter for the company which further proved the resounding dominance that Intel has in their primary business space. Intel reported Revenue of $12.8B up from $11.4B (12%) in the previous quarter and up $2.5B (25%) from the same quarter a year ago. On $12.8B in revenue, Intel also was able to squeeze out $4.2B in net income which represented an EPS of 56 cents.

As a result of PC shipments being slightly down, Intel?s gross margin actually dropped two percent from a year ago to 61%. One thing that didn?t make Intel?s earnings report look nearly as good was their basically flat net income whereas they had reported $4.18B in 4Q 2010 and are reporting $4.2B in 1Q 2011. This also means that EPS was basically flat as well even though Intel increased revenue by 12%. Furthermore, their outlook for 2Q 2011 is basically a flat one reporting an expected revenue of $12.8B, gross margin of 61%, and depreciation of $1.2B.

These numbers reflect a basically flat growth level for Intel in 2011. This is likely because they do not expect the PC market to expand much more beyond its current levels. There?s also a possibility that the Cougar Point disaster related to the Sandy Bridge chip could be one of the reasons why Intel?s net income for 1Q 2011 was basically flat when compared to 4Q 2010. There?s actually a good possibility that if Intel rebounds quickly enough from this problem that they could see themselves being more profitable in 2Q 2011 than in 1Q 2011.

Intel is also expending quite a bit of energy in promoting their cloud initiatives and server initiatives. Their newly released lines of E3 and E7 Xeon processors are expected by Intel to not only replace their own legacy hardware but also to continue to take away market share from AMD. As a result, they are still likely to see growth in the Server chip sector and even growth in their Itanium division as well. Their server business is likely only to continue to grow as they prepare to launch Ivy Bridge based server chips later this year.

The key factor really is their continued lack of a feasible dedicated GPU solution as well as their near entirely non-existent mobile solutions. Atom is great for netbooks, but it currently lacks the power savings that smartphones and tablets desire.They are currently spending quite a bit of money on trying to improve their MIC architecture Knights Ferry as well as their low-power Atom SoC Z series chips. 2011 is likely going to be the year when Intel will be forced to either put up or shut up for mobile as their competition is ramping to release quad-core ARM based SoC. These two factors are likely the reason why Intel?s stock continues to hover around $20. Intel has relegated themselves to the big business curse, they simply cannot get themselves to push hard enough to make their stock move. Hopefully they can get out of this rut, but it?s really amazing that Intel?s 52 week range is $17.60-$24 a very narrow range for a company of such consistent profitability.

At the given moment, Intel’s stock is up 6.65% at $21.18, up from a close of 19.86 yesterday.