AMD (NYSE: AMD) has been suffering from an identity crisis, and its earnings report for the first quarter of 2011 is no different. The company posted net income of $510 million on $1.6 billion in revenue -- which, of course, sounds amazing on paper. The only thing is, $492 million of the profit had nothing to do with income from operations, which was only $54 million.

The difference between actual and net income is a result of AMD's noncash gain of $492 million related to the dilution of its equity interest in GlobalFoundries. Mubadala Development recently took control of ATIC, majority owner of GlobalFoundries -- and began increasing its share in GlobalFoundries, resulting in the $492 million check. That transfer boosted AMD's actual net income from $18 million to $510 million.

This type of event seems to be a recurring theme. Although we're happy that AMD was able to post another quarterly profit, the company simply cannot get through a quarter where some sort of event or settlement artificially inflates the income numbers.

The $510 million figure results in earnings of $0.68 per share. When we consider non-GAAP earnings, which exclude the $492 million, we see that AMD has taken in $0.08 per share, which is still $0.03 more than what analysts had expected. Since it beat expectations, AMD is likely to surge in trading.

Gross margin was at 43%, down from 45% in the previous quarter and 47% a year ago.

The biggest things that AMD has to worry about are finding a permanent CEO and making sure its Accelerated Processing Unit strategy is on mark with both price and performance. AMD also cannot falter in the face of Intel's (Nasdaq: INTC) Sandy Bridge screwup. The recall cost a lot of OEMs time and money, and with the release of the Bulldozer APU, AMD has a chance to create some revenue in both its consumer and enterprise businesses. If AMD can regain market share in both areas and remain profitable, it can definitely expect a share-price boost. The stock could surge beyond its 52-week high if the company can show promise in both the Llano and Bulldozer APUs.

So far, the Brazos APU appears to be gaining some traction in the budget market, but it still has a way to go, and there's no way AMD can be profitable on Brazos alone. If you've listened to AMD's earnings calls for the past two years, you know that Bulldozer has been the topic of discussion. If Bulldozer doesn't deliver on expectations, we don't see how AMD can move forward, considering the flop that Barcelona was.

We want AMD to be successful because we want more market competition to drive prices down for the high-end, midrange, and even entry-level user. Simply put, AMD's success is good for everyone. Including Intel.

It's likely that Monday will be a fairly good day for AMD's share price.

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