AMD makes first profit in 13 quarters, with help from Intel settlement

Advanced Micro Devices made a rare profit in the fourth quarter, due in no small part to a big antitrust settlement from Intel, as well as a recovering PC market. It was the first time the company posted a quarterly profit since 2006.

The Sunnyvale, Calif.-based chip maker also reported a profit, excluding the Intel payment of $1.25 billion, thanks to a resurgence in demand for personal computers in the fourth quarter. Overall, holiday PC purchasing was strong, lifting both Intel and AMD, in no small part due to the launch of Microsoft’s Windows operating system.

AMD reported revenue of $1.6 billion, up 42 percent from the fourth quarter of 2008. Net income was $1.1 billion, or $1.52 a share, compared to a loss of $1.4 billion, or $2.34 a share, a year earlier. The fourth quarter 2009 result includes the favorable one-time Intel payment, which amounted to $1.57 a share.

For the year, AMD posted revenue of $5.4 billion, down from $5.8 billion a year earlier. Net income for the year was $304 million, compared to a loss of $3.1 billion in 2008.

Starting in the first quarter, AMD will no longer report the results of its Globalfoundries sister company, which manufactures chips.

Non-GAAP net income was $80 million in the fourth quarter, compared to $2 million a year earlier. Analysts had expected a loss.

AMD’s outlook is for revenues to be down on a seasonal basis in the first quarter. During the quarter, AMD restructured its debt, clearing away any concerns about its upcoming debt payments. The company gained a major new customer, Lenovo, and launched new graphics chips to put pressure on rival Nvidia. Revenue in graphics was up 58 percent compared to a year ago, while computer chips such as microprocessors and chip set revenues were up 14 percent.