AMD Reports Record Revenue, Small Profit
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AMD (NYSE: AMD) today reported a net income of $1.178 billion, or $1.57 a share, on revenues of $1.646 billion. Obviously, the $1.25 billion antitrust settlement with Intel did wonders to skew the bottom line, but that should not occlude the fact that AMD had a tremendous quarter in sales and posted a slim profits even without Intel's payoff.
For the quarter ended Dec. 26, AMD's $1.646 billion in revenue was an 18 percent increase from the third quarter and a 42 percent improvement over the fourth quarter of 2008.
Minus the Intel payoff and the impact from its soon-to-be-divested foundry business, AMD reported fourth quarter non-GAAP net income of $80 million, and non-GAAP operating income of $169 million. In the third quarter of 2009, AMD -- minus the foundry business -- reported non-GAAP net income of $2 million and a non-GAAP operating income of $47 million.
The company clearly exceeded expectations. Analysts surveyed by FactSet Research had been expecting a consensus loss of $0.18 per share on revenue of $1.49 billion.
For the year ended Dec. 26, AMD reported revenue of $5.403 billion, a 7 percent decline from the $5.808 billion it saw in 2008, while net income came in at $304 million. That's a vast improvement over the $3.129 billion it lost in fiscal 2008.
Like its competitor Intel (NASDAQ: INTC), AMD faced several lopsided quarters due to the economic downturn. The fourth quarter of 2008 was dismal, which explains the huge jump year-over-year, and the first half of 2009 was equally bad. But a marked recovery in the second half of 2009 helped minimize the decline compared to 2008.
"AMD's quarter marks another milestone in our transformation and underscores our growing momentum," AMD President and CEO Dirk Meyer said in a statement. "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."
As of the first quarter of 2010, AMD will report operating results for what was formerly referred to as AMD Product Company, which is the company minus its foundry business. Thanks to the settlement with Intel, it can now fully divest its foundry unit, Globalfoundries, and no longer be forced to carry its financial results on its balance sheet.
AMD expects revenue to be down seasonally for the first quarter of 2010 but it did not provide details. It has an earnings call scheduled with financial analysts to discuss the results. InternetNews.com will have coverage of the call.