Intel reported fourth-quarter revenue and profit that were higher than expected, but the stock fell slightly in extended sessions.

The shares of the Santa Clara, California-based company initially fell about 3% in late trading but recovered slightly after the company expressed confidence in demand for its chips and its ability to manage supply chain constraints.

Additionally, Intel announced that its board of directors approved an annual cash dividend increase of 5% to $1.46 per share.

The board of directors declared a quarterly dividend of $0.365 per share on the common stock of the company, payable on March 1 to shareholders of record on February 7.

According to IBES data from Refinitiv, the company forecast first-quarter earnings per share of 80 cents, compared to an expectation of 86 cents.

Intel's forecasted gross margin of 52% was within the previous range for the next two to three years, but the figure raised concerns.

On a non-GAAP basis, Intel reported fourth-quarter net income of $6.1 billion (down 27% year over year but above Intel's own guidance), or $1.09 per share, on revenue of $19.5 billion, up 4%.

Revenues from datacenters increased, while client computing sales decreased year over year.

The outlook overshadowed Intel's fourth-quarter results, which were a record and exceeded expectations, according to Tony Balow, Intel's vice president of investor relations.

Adjusted revenue was $19.5 billion, exceeding Wall Street expectations of $18.3 billion, and adjusted earnings per share were $1.09, exceeding the 91 cents expected by analysts.

Intel's higher-margin data center business increased 20% to $7.3 billion in the latest quarter, also setting a record for that segment. According to FactSet data, analysts expected revenue of $6.73 billion on average.

According to IBES data from Refinitiv, the company expects first-quarter revenue of $18.3 billion, exceeding analysts' average estimate of $17.62 billion.

The forecast is based on the company's in-house chip manufacturing capacity meeting strong demand from the personal computer, data center, and artificial intelligence markets despite a global semiconductor supply crunch.

Intel, as one of the few semiconductor companies that designs and manufactures its own chips, has historically been better able to weather supply chain disruptions.

Intel announced last week that it would invest $20 billion in two chip factories in Ohio, which could grow to become the world's largest chip manufacturing complex with up to eight planned.

Investors are closely monitoring Intel's progress in ramping up those factories. Certain analysts have expressed concern about a glut occurring at a time when not only Intel, but also rivals Taiwan Semiconductor Manufacturing Co. and Samsung Electronics, are expanding their manufacturing capabilities.