The company reported net profit of US$257 million on a GAAP (generally accepted accounting principles) basis for the quarter ended on March 27, compared to a net loss of $416 million in the first quarter of 2009.
On a non-GAAP basis, the company reported net income of $63 million for the quarter, compared to a loss of $189 million in the year-ago quarter. Earnings per share were $0.09, beating the $0.05 estimated by analysts polled by Thomson Reuters. AMD recognized a non-cash gain of $325 million from the deconsolidation of the GlobalFoundries spin-off.
This is the second consecutive quarterly profit for AMD. It reported its first profitable quarter in three years for the fourth quarter of 2009, when it had net income of $1.18 billion, benefiting mainly from a $1.25 billion legal settlement with Intel.
AMD reported revenue of $1.57 billion for the first quarter of 2010, an improvement from $1.18 billion a year earlier. The revenue beat analyst estimates of $1.54 billion.
Strong product offerings resulted in "record" first-quarter revenue, said Dirk Meyer, AMD's CEO, in a statement. The company introduced new DirectX 11 graphics cards and broadened its PC and server microprocessor offerings.
Revenue from its Computing Solutions segment, which includes microprocessors, increased 23 percent year-over-year, the company said. The growth was driven by an increase in microprocessor unit shipments. Revenue for the graphics segment, which includes graphics cards, increased 88 percent year-over-year.
The strong results come two days after rival Intel reported a 288 percent jump in net income, to $2.4 billion, for its first quarter. Intel attributed the rise to an increase in PC shipments.
AMD also benefitted from stronger PC sales, as well as higher average selling prices for its laptop and server processors, Meyer said during a conference call to discuss the results.
Both companies' results are in line with research from IDC, which said Wednesday that PC shipments grew by 24.2 percent in the first quarter, to 79.1 million units.
Meyer said AMD sees an opportunity for the company to sell more processors for laptops, an area where Intel is very strong.
AMD will start manufacturing chips on a 32-nanometer manufacturing process in the second half of the year, which will boost speed and power efficiency. Samples have already been shipped to a few customers and the chips will start appearing on the market in desktops and laptops in the first half of next year, Meyer said.
The company's Fusion laptop chips, which combine a CPU and GPU on the same piece of silicon, are also being sampled and are on track to reach the market in the first half of next year, Meyer said. They will be made by AMD's spin-off manufacturing arm, GlobalFoundries.
Sales of AMD's six-core Istanbul processor picked up during the quarter as enterprise spending increased, Meyer said. The company launched its 12-core Magny-Cours processors on March 30 and now has its strongest product lineup since mid-2006 from a pricing and performance-per-watt standpoint, he said.
Also during the quarter, AMD launched seven graphics cards for desktops and laptops with support for DirectX 11, which provides smoother graphics. The company has sold 6 million DirectX 11 graphics cards to date, Meyer said.
