Yeah, sure, it lost a nasty $600 million, or $1.09 a share, but that includes 24 cents attributable to its $5.6 billion acquisition of ATI, leaving 85 cents, better than the Street expected. AMD has been losing money for the last nine months. A year ago this time it made $88.9 million.

Meanwhile, revenues came to $1.378 billion, significantly better than the $1.26 billion folks thought it would do.

At the same time, its long-term debt and capital lease obligation now total $5.3 billion, up from $3.6 billion. So it's talking about realigning its business model and cutting costs this half by $200 million in capital expenditures.

The company said microprocessor shipments were up 22% year-over-year and up 38% sequentially to $1.098 billion. It claims to have won back market share both in terms of revenue and units sold, attributing its tickled revenues to channel demand, sales to Toshiba and a broader adoption of its products in general including the momentum of its new graphics business although its graphics sector was flat at $195 million.

AMD's paying for the business though. If Intel thinks it had a lousy gross margin, well, AMD's is an utterly feeble 34%. A year ago before the price wars wreaked real damage AMD's margin was 57%. The only thing it can say is that 34% is better than the 31% it got in the first quarter.

AMD complained of lower ASPs for desktop chips, the ground zero of the price wars according to Intel. AMD said its mobile shipments increased 21% sequentially and 82% year-over-year.

The company also wrote off $30 million in old chips, all DDR 1-based, costing two points of margin.

Consumer electronics revenues were down 28% sequentially to $85 million from $118 million because of "significantly" lower handheld sales.

AMD said it expected Q3 revenues to increase in line with a seasonally up quarter and its margin to improve. It defined seasonality as 8%-10% in PCs.

The company is hoping to break even by the end of the year, but it's also talking about increasing share and won't say whether its preference is profits or share.

It admitted that the Barcelona quad-core that it's expecting to change its fortunes was complicated and required more design work than it anticipated. That's apparently why it will appear initially next month in a form less powerful than followers thought it would.

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