Intel has reported first quarter revenue of $12.9 billion with a net income of $2.7 billion. The company paid dividends of $1 billion and used another $1.5 billion to repurchase stock currently trading at a bit over $28 per share.

The earnings translate to $0.53 per share which is slightly higher than Wall Street expectations of $0.50 per share. Revenue also improved from this time last year and for the second quarter, the chip giant is projecting quarterly revenue of $13.6 billion, again higher than the $13.45 billion that Wall Street anticipated.

CFO Stacy Smith said that continued hard drive shortages across the supply chain negatively impacted inventory levels but he didn’t feel as though that affected PC sales in the quarter. The company feels they are setting up for a strong second half.

During the investor call, Intel CEO Paul Otellini announced that Intel’s first smartphone will be launching soon – and by soon, we mean later this week. The Verge points out, however, that the first Atom-based handset powered by Intel is the Lenovo K800 which is only slated for release in China at this point. The K800 features a 1.6GHz processor, Android 4.0 Ice Cream Sandwich and a 4.5-inch display.

In addition to joining the tightly-contested smartphone race alongside ARM players Qualcomm and Texas Instruments, Intel will soon be releasing Ivy Bridge, the 22nm die shrink of Sandy Bridge that will be the first to utilize tri-gate transistor technology.