AMD settlement expected to hit Intel's net profit in Q4

A financial analyst sees lower profit in Intel's fourth quarter, while the company itself sees a lower tax rate

The cash portion of Intel's legal settlement with Advanced Micro Devices (AMD) could shave as much as US$800 million off Intel's net profit in the fourth quarter, according to investment banking firm Credit Suisse.

Credit Suisse lowered its earnings per share estimate for Intel to $0.29 in the fourth quarter from $0.43 previously, in a report issued late Thursday.

Intel, the world's largest chip maker, will expense the $1.25 billion legal settlement from antitrust litigation with rival AMD in the fourth quarter, the chip maker said in a statement.

Intel expects the $1.25 billion expense to raise its spending in the quarter to $4.2 billion from $2.9 billion previously. Spending on Intel's accounting statement includes research and development as well as general and administrative expenses. Legal fees normally fall under general and administrative expenses in accounting.

The expense will also lower Intel's tax rate to around 20 percent from 26 percent previously, the company said.

Intel did not calculate the impact of the settlement on its net profit.

The legal settlement between Intel and AMD also includes a five-year cross-license agreement and ends all claims of breach of contract from a previous license agreement, the two companies said Thursday. They also agreed to a set of business practice provisions as part of the settlement.

AMD's stock rocketed 21.8 percent after news of the deal broke to end regular trading on Thursday at $6.48 on the New York Stock Exchange.

Intel stock fell 0.8 percent on the Nasdaq Stock Market to end at $19.68 Thursday.

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Dan Nystedt

IDG News Service
Show Comments



Victorinox Werks Professional Executive 17 Laptop Case

Learn more >



Back To Business Guide

Click for more ›

Brand Post

Most Popular Reviews

Latest Articles


PCW Evaluation Team

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Walid Mikhael

Brother QL-820NWB Professional Label Printer

It’s easy to set up, it’s compact and quiet when printing and to top if off, the print quality is excellent. This is hands down the best printer I’ve used for printing labels.

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Ratchada Dunn

Sharp PN-40TC1 Huddle Board

The Huddle Board’s built in program; Sharp Touch Viewing software allows us to easily manipulate and edit our documents (jpegs and PDFs) all at the same time on the dashboard.

Featured Content

Product Launch Showcase

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?