AMD reports fourth quarter earnings

Advanced Micro Devices the little computer chip manufacturing company that refuses to die has reported revenue for the fourth quarter of 2009 at $1.646 billion. This is an increase of 18 percent compared to the previous quarter and 42 percent compared to the fourth quarter of 2008.

This certainly is good news for AMD. However, does this increase in revenue mean that AMD has turned things around? Will AMD be able to survive for another year in the cutthroat world of computer processor makers where big evil monopolies like to go around stepping on the small fry competition? Unfortunately, I think not and I will tell you why in the following paragraphs.

AMD recently won a settlement of $1.25 billion from Intel for antitrust issues and patent cross license disputes. This income is added to AMDs forth quarter books. If you take away the $1.25 billion AMD was awarded by the courts from gross earnings of $1.646 billion you have $396 million. This may seem like a lot but it isn't when you see what rival Intel earned.

Consider revenues Intel earned during the fourth quarter of 2009 and things start looking somewhat bleak for AMD. Intel Corporation reported revenue of $10.6 billion during this same 3-month period and they didn't receive any pay off. This was a monstrous increase of 875% versus a measly 18% for AMD! If you take away the settlement then the increase in revenue for AMD is a tiny percentage increase. $396 million for AMD and $10.6 billion for Intel! That's not very good in my opinion.

I guess if you figure that AMD lost a staggering $3.129 billion in fiscal 2008 then a $396 million surplus for the last quarter of 2009 starts looking very good. Add in the $1.25 billion from Intel and things indeed look rosy for AMD. Too bad AMD couldn't garner a $1.25 billion settlement from Intel every quarter. Then they might be able to make ends meet. Unfortunately that will never happen.

Intel may like to throw their weight around and bully personal computer manufacturers in to staying away from the competition but they aren't stupid. Intel can afford to pay the occasional fine because the benefits of applying pressure via hard nosed business tactics is worth it in the long run and more sales can be made. When a company can earn over 10 billion dollars in a 3-month period of time they really don't care if they have to pay a fine.

I like AMD because they never give up, plus they provide a good product at a reasonable price. I also like their product because it provides competition to be present in the market place. If there were only one company selling computer processors then they could charge anything they wanted.

Look at the other monopoly operating in the computer products market, Microsoft and you will see that being a monopoly during hard economic times is the only way to go. Heck, it's the only way to go during good economic times.

You can check out AMDs financial report for Q4 2009 here. Cheers...