Advanced Micro Devices has reported its first quarterly profit for the first time in three years as it benefited from a legal settlement with Intel.

AMD, world’s No. 2 supplier of processors for PCs, said it pocketed $1.18 billion in profit during the fourth-quarter of 2009 as compared with a loss of $1.44 billion in the year-ago period. In the previous year quarter, the company took chares of $911 million.

Earnings of $1.52-a-share beat analysts’ consensus forecast for a loss of 18 cents-a-share on revenue of $1.5 billion.

Company’s revenue soared by 42 per cent to settle at $1.65 billion, while gross margin jumped more-than-expected, from 23 per cent to 45 per cent.

Graphics chips’ sales advanced 58 per cent to $427 million during the same period.

Commenting on the topic, company’s CEO Dirk Meyer said, “AMD's quarter marks another milestone in our transformation and underscores our growing momentum.”

AMD, which expects PC market to grow between 10 to 12 per cent in 2010, said Globalfoundries will appear only as an equity investment in future AMD financial statements.