Intel propels AMD into profitability

AMD has posted its first profit in three years, courtesy of Intel.

The chip company posted a profit of $1.18 billion in the fourth-quarter, a significant turn around from the $1.4 billion loss in the same period last year.

AMD was given a leg up by the $1.25 billion it was paid by Intel to settle their antitrust disputes. The smaller company had accused the chip giant of using illegal tactics – including offering rebates to PC manufacturers – to “lock AMD out of as many customers and market segments as possible.”

Revenue hit $1.64 billion for the period, with AMD’s microprocessor division accounting for $1.2 billion – an increase of 14% compared to the same quarter of the previous year.

AMD’s quarter marks another milestone in our transformation and underscores our growing momentum

The company also reported healthy sales of its Radeon graphics cards over the Christmas period, pushing revenues in its graphics card division up 40% to $427 million.

Alongside its windfall from Intel, AMD also claimed that its decision to spin off its manufacturing arm, cut staff and divest loss-making businesses was finally beginnign to bear fruit.

“AMD’s quarter marks another milestone in our transformation and underscores our growing momentum,” says AMD chief executive Dirk Meyer. “We’re pleased with our progress,” he added, noting that the company had managed to shed $2.2 billion in debt over 2009.

Meyer also highlighted AMD’s ability to attract new customers, principally Lenovo, which will offer AMD chips in its ThinkPad laptops for the first time. The company now supplies chips to the world’s top five PC makers.

Moving forward, Meyer says the company will be looking at getting its products into netbooks. “We’re under-penetrated in that category of product,” he says. “The broad (notebook) category represents an opportunity for us this year.”