AMD handily beats fourth-quarter estimates

IDG News Service - Advanced Micro Devices (AMD) on Thursday reported net profit for the fourth quarter that beat forecasts, due mainly to income from a patent license and a legal settlement with Samsung.

The company's net profit was US$375 million, or $0.50 per share, beating the consensus earnings forecast of $0.11 per share, according to analysts polled by Thomson Reuters. AMD's fourth-quarter revenue was $1.65 billion, the same as last year and above analyst estimates of $1.63 billion.

In the fourth quarter of 2009, AMD reported a net profit of $1.2 billion, or $1.52 per share, due mainly to a separate legal settlement with Intel.

AMD is Intel's biggest rival in the market for microprocessor chips. Its financial report comes after a tumultuous few weeks for the company in which its CEO, Dirk Meyer, resigned amid complaints he did not focus enough on mobile devices.

AMD started shipping its first laptop and netbook chips based on its new microprocessors, called Fusion, during the fourth quarter. Fusion chips combine a microprocessor with a graphics processor in one chip, which AMD says will improve overall PC performance and draw less power.

The full year 2010 marked the first time AMD's results did not include its chip manufacturing operations. The company's manufacturing business was spun off into GlobalFoundries the previous year.

For the full fiscal year ended Dec. 25, 2010, AMD reported revenue of $6.49 billion and net profit of $471 million, according to a statement. In 2009, AMD's revenue was $5.40 billion and its net profit $304 million.

Intel, by contrast, has focused heavily on putting its chips in mobile devices, yet its profit and revenue in the fourth quarter were led by server chips. Intel last week reported its best year ever with full-year net income of $11.7 billion and revenue of $43.6 billion.

AMD executives said the company's revenue in the first quarter will be flat to slightly down compared to the fourth quarter, which is better than normal.

"We are seeing better seasonal demand," said Thomas Seifert, interim CEO of AMD, in a conference call. "AMD enters 2011 with significant momentum, amplified by the successful launch of our first Fusion APUs."

AMD expects to make a separation payment of $12 million to former CEO Dirk Meyer.