Intel Corp's strong quarterly report failed to lift its shares on Friday, as some investors, remembering the company's reversal of a bullish outlook a year ago, questioned its forecast.

While Intel posted better-than expected revenue and margins for the fourth quarter and gave a rosy outlook for early 2011, Ashok Kumar, an analyst at Rodman & Renshaw, said the market was skeptical after the company followed an upbeat outlook with a weak sales forecast in the third quarter last year.

The problem is, Intel's forecasting ability is no better than a coin toss, he said, while maintaining an outperform rating on the shares.

Last year, when the Street was skeptical about the second half, the company gave a very bullish guidance and a few weeks later they negatively pre-announced. So people take Intel's forecasts with a bucket of salt.

He and other analysts also cited lingering concerns about the company's minor role in the fast-growing market for smartphones and tablet computers.

Intel shares were down 0.8 percent at $21.12 in late morning on the Nasdaq, although shares of other semiconductor-related companies were up.

Chip equipment maker Applied Materials was up 5.9 percent while KLA Tencor and Novellus were both up 7.4 percent after Intel said on Thursday it would spend more to increase production capacity.

Intel is the first major technology company to report its fourth-quarter results. (Graphic: Intel's 4th-qtr earnings and forecast: http://r.reuters.com/tun36r )

Overseas investors also appeared to believe Intel's report boded well for the overall industry, with British chip designer ARM up 6.7 percent at a 10-year high and Japan's Tokyo Electron rose 3.2 percent. Dutch semiconductor equipment vendors ASML and ASMI rose 6.3 percent and 5.3 percent, respectively.

(Reporting by Ritsuko Ando, editing by Matthew Lewis)

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