AMD posts profit on Intel settlement

From CNET News.com: Advanced Micro Devices posted a fourth-quarter profit of $1.18 billion, its first profit in three years, largely due to a massive settlement with Intel.

The $1.178 billion profit, or $1.52 per share, beat the analyst consensus estimate that had projected AMD to record a loss of 18 cents per share. In the same quarter last year, AMD lost $1.4 billion, or $2.36 per share.

The second largest global supplier of processors for PCs posted revenue of $1.646 billion, an increase of 42 percent compared with the same period a year ago. This beat analyst revenue estimates, which were pegged at $1.5 billion.

Fourth-quarter AMD gross margin, an important indicator of profit, was 45 percent, compared with 42 percent in the prior quarter and 23 percent in the year-earlier period.

AMD stated that the "favorable impacts" on its net income were primarily from a legal settlement with Intel. During the quarter, Intel and AMD announced a comprehensive agreement to end all outstanding legal disputes. As a result of this agreement, Intel paid AMD $1.25 billion.

AMD said it expects revenue to be down seasonally for the first quarter of 2010.

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