Intel Virtualization Journal

Economics for Investors

AMD managed to wring out its first profit in years in Q4 but the tickle was due solely to Intel and the $1.25 billion Intel paid AMD to settle the massive antitrust suit AMD lodged against its big competitor.

On its own AMD lost eight cents a share versus expectations of a loss of 17 cents a share on revenues of $1.49 billion.

Thanks to Intel, however, it made $1.18 billion, or $1.52 a share - a number that includes what AMD calls a "net favorable impact" from Intel of $1.238 billion, or $1.57 per share - on better-than-expected revenue of $1.646 billion, up 42% year-over-year and up 18% sequentially. Unit sales of MPU and graphics chips were up though ASPs were down. AMD's gross margin worked out to 45%, up from 23%.

A year ago AMD lost $1.44 billion or $2.36 a share.

Without Intel its operating income worked out to $64 million.

For the year, AMD reported better-than-expected revenue of $5.4 billion, down from $5.8 billion in '08, and income of $304 million.

AMD expects revenue to be down seasonally this quarter and it said it will stop consolidating the results of its spun-out factories this quarter. The deal with Intel will let AMD divest completely.

By comparison Intel last week reportedly hysterically good Q4 results with earnings up a giddy 875% from the '08 nightmare, on revenues of $10.6 billion, up 28% year-over-year. It said the quarter was one of the most profitable ever, especially in the last decade.