Intel's rival AMD finally makes a profit

It was reported today that chip giant Advanced Micro Devices (AMD) finally made a profit after three long years in the dry. The outfit reported a Q4 revenue of $1.65 billion which is an increase of 18 percent compared to the previous quarter and 42 percent compared to the fourth quarter of 2008.

AMD had been struggling with its line of underwhelming CPUs through the past three years. Rival Intel had designed chips with 45nm fabrication process and they sold like hot cakes in the market when they launched. Intel also went ahead and brought up the Core i7 and i5 processors, and have recently finished development of the 32nm chips as well. AMD's tri core and even dual core processors did not prove as successful since they simply did not perform as well as the Intel ones.

Although AMD can thank Intel for the large wad of cash they gave in 2009. The European Antitrust Commission found Intel guilty of anticompetitive practices and fined the company $1.45 billion. AMD did not get any part of that money but brought up a similar case in the US, and Intel settled for a price, resolving all legal disputes. AMD got $1.25 billion in damages, a large amount of the 'Q4 profit'. However AMD can thank their GPU developing section ATI which is doing rather well.

As per AMD's press release, 'In the fourth quarter of 2009, AMD reported net income attributable to AMD common stockholders of $1.178 billion, or $1.52 per share, which includes a net favorable impact of $1.238 billion, or $1.57 per share. AMD reported operating income of $1.288 billion in the quarter, including a net favorable impact of $1.224 billion. The net favorable impacts were primarilyfrom a legal settlement with Intel Corp.'

"AMD's quarter marks another milestone in our transformation and underscores our growing momentum," said Dirk Meyer, AMD president and CEO. "We enter 2010 having completed the transition to a fabless business model, reached a historic antitrust settlement, and made significant progress strengthening our balance sheet. Our innovative strategy for designing the world's most vivid digital experiences continues to generate demand." Fourth quarter 2009 AMD gross margin was 45 percent compared to 42 percent in the prior quarter. Fourth quarter 2009 AMD Product Company non-GAAP gross margin was 41 percent compared to 38 percent in the prior quarter.