Advanced Micro Devices (NASDAQ:AMD) will release its quarterly report on Thursday, and unfortunately, investors expect the company to say that it lost money again during the second quarter. With so many problems facing the company both in the PC and mobile industries, it'll take a pretty big turnaround to get AMD earnings moving in the right direction again.

In light of those challenges, the biggest surprise for AMD is the huge run-up in its share price so far this year. Investors are clearly hopeful that the company's recent victories in getting its chips into the latest-generation gaming consoles might help set the stage for a true recovery, but that doesn't change the fact that at least for now, both revenue and net income have been falling precipitously. Let's take an early look at what's been happening with Advanced Micro Devices over the past quarter and what we're likely to see in its report.

Stats on Advanced Micro Devices

Analyst EPS Estimate

($0.13)

Year-Ago EPS

$0.06

Revenue Estimate

$1.11 billion

Change From Year-Ago Revenue

(21.5%)

Earnings Beats in Past 4 Quarters

2

Source: Yahoo! Finance.

Can AMD earnings catch up with its stock?
Analysts have started getting slightly more optimistic about the long-term prospects for AMD earnings, reducing their full-year 2013 loss estimates by almost $0.10 per share and reversing initial expectations for a $0.05-per-share 2014 loss to predict a similarly sized gain. The stock has been on fire, rising nearly 75% just since early April as investors who left the stock for dead have started to regain confidence in the company's future.

For years, AMD has found itself stuck in the middle of a major paradigm shift in the chip industry. On one hand, the company was never able to dislodge Intel from its dominance in the PC chip business, with Intel currently commanding about a five-to-one advantage in market share over AMD. Meanwhile, on the mobile front, Qualcomm (NASDAQ:QCOM) has done a good job of using the mobile revolution to boost its share of the overall microprocessor market, as AMD fell to the No. 4 position behind Intel, Qualcomm, and Samsung. Without a strong position in either mobile or PCs, AMD has struggled to find a workable strategic vision for its future.

But AMD made it clear in its first-quarter earnings report that it's banking the success of the coming PlayStation 4 and Xbox One to help it boost its future prospects. Analysts have started to agree, with two Wall Street analysts boosting their price estimates in just the past week. They believe that the long delay between game-console upgrades could lead to especially brisk sales of the consoles, boosting AMD's take and potentially setting up years of recurring revenue before the next console upgrade.

AMD hasn't given up on other potential avenues for growth. The company has made substantial progress in delivering on a promise to build chips based on the ARM Holdings (NASDAQ:ARMH) architecture, which AMD hopes will give it better access to the data-center server market. ARM Holdings has had huge success in beating much-larger rivals like Intel to the mobile punch, so trying to ride on ARM's coattails is a reasonable strategy for AMD to pursue.

In looking at AMD earnings, look beyond all the hype about gaming consoles to figure out what else the company expects to do to boost its growth. If AMD wants to avoid any gaming boost becoming a one-time improvement that quickly gives way to further losses, it needs to demonstrate its ability to become more relevant across the industry.

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Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter @DanCaplinger. The Motley Fool recommends Intel. The Motley Fool owns shares of Intel and Qualcomm. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.