On July 19, processor designer AMD (NYSE:AMD) released second-quarter earnings for the period ended June 30.

  • Compared to last year, these results are quite horrible. The combination of an extended price war with Intel (NASDAQ:INTC), problems managing a more complex product portfolio, and acquisition-related costs have taken a mighty toll on AMD.

  • If you put these numbers next to the previous quarter's instead, it's a different story. The bleeding appears to have stabilized at last, and all the margins are up a little bit on that sequential basis.

  • Despite the market pressures, or indeed because of the ongoing market haboob, AMD keeps pumping funds into better manufacturing facilities and more research. In this battle, neither combatant is content to go gently into that good night.

(Figures in millions, except per-share data)

Income Statement Highlights

Q2 2007

Q2 2006

Change

Sales

$1,378

$1,216

13.3%

Net Profit

($600)

$89

N/A

EPS

($1.09)

$0.18

N/A

Diluted Shares

552.0

500.2

10.4%

Get back to basics with the income statement.

Margin Checkup

Q2 2007

Q2 2006

Change*

Gross Margin

33.5%

56.8%

(23.3)

Operating Margin

(33.2%)

8.4%

(41.6)

Net Margin

(43.5%)

7.3%

(50.8)
*Expressed in percentage points.

Margins are the earnings engine.

Balance Sheet Highlights

Assets

Q2 2007

Q2 2006

Change

Cash + ST Invest.

$1,594

$2,530

(37.0%)

Accounts Rec.

$648

$572

13.4%

Inventory

$892

$405

120.1%

Liabilities

Q2 2007

Q2 2006

Change

Accounts Payable

$985

$706

39.4%

Long-Term Debt

$5,318

$647

721.8%

The balance sheet reflects the company's health.

Cash Flow Highlights

Q2 2007

Q2 2006

Change

Capital Expenditures

$414

$455

(9.1%)

Owner Earnings

($688)

($174)

(296.3%)

Free cash flow is a Fool's best friend. When that best buddy's not available, owner earnings can play the wingman.

Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean.

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At the time of publication, Anders Bylund was an AMD shareholder but had no other position in any company mentioned. Fool rules are here.