Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Advanced Micro Devices (NASDAQ:AMD) dropped nearly 19% early Friday after the company posted mixed second-quarter results and weaker-than-expected forward guidance.

So what: Quarterly revenue rose 24% year-over-year to $1.44 billion, which translated to a GAAP loss of $36 million, or $0.05 per share. On an adjusted basis, AMD turned in net income of $17 million, or $0.02 per share. Analysts, on average, were expecting higher adjusted earnings of $0.03 per share on sales of $1.44 billion.

Going forward, AMD also told investors it expects third-quarter revenue to "increase 2%, plus or minus 3%, sequentially." That means a mid-point of roughly $1.47 billion, which is significantly below the $1.57 billion analysts were modeling.

For all of 2014 so far, AMD has stated that it still expects revenue to grow year-over-year, but changed its verbiage regarding net income slightly from last quarter. Specifically, rather than stating that it expects to be profitable at the (GAAP) net income level, it now only expects to be "non-GAAP profitable at the net income level for the year." For reference, analysts were already expecting 2014 sales to rise 12.8% to $5.98 billion, with non-GAAP earnings of $0.19 per share. 

Now what: Still, AMD CEO Rory Read insisted AMD's transformation strategy is on track, saying "We continue to strengthen our business model and shape AMD into a more agile company offering differentiated solutions for a diverse set of markets."

That may be so, but I can't blame the market for taking a step back today as AMD's transition continues to move forward slower than investors have hoped. Shares may look reasonably priced at around 0.6 times trailing 12-month sales, and 17 times next year's estimated earnings, but I think AMD shareholders could have more pain in store as analysts have time to fully digest today's setback.