These three companies just didn't live up to Mr. Market's expectations last week. Sometimes, an earnings stumble is a signal to sell, but digging in the dirt is also a good way to find turnaround candidates while they're getting beaten down.

Today, our hapless underperformers come in three flavors: high expectations, low expectations, and a decidedly mixed bag.

By the numbers

Company

Reported EPS

Estimated EPS

Reported Revenue (Millions)

Estimated Revenue (Millions)

Google (NASDAQ:GOOG)

$4.63

$4.74

$5,367

$5,400

Advanced Micro Devices (NASDAQ:AMD)

($0.60)

($0.52)

$1,350

$1,500

Microsoft (NYSE:MSFT)

$0.46

$0.47

$15,840

$15,650

High hopes
Online search and advertising colossus Google takes our first at-bat. We have come to expect a lot from Big G, and sometimes the targets get set a little too high. The thing is, 35% higher earnings on 39% stronger revenue, year over year, would be great news for other presumed growth champions such as eBay (NASDAQ:EBAY) or fellow tech giants such as IBM (NYSE:IBM), but it just ain't good enough for Google.

Blame whatever you want -- a weak economy, a lack of YouTube revenue, analysts with unrealistic expectations -- because this is a very complex business with lots of moving parts. Trying to pin an exact forecast on such a nebulous beast is a Herculean task, maybe even Sisyphean.

More to the point, that business model is constantly changing. Google is making a conscious effort to serve fewer ads, for example. "That's basically our continued focus on quality," said product-management VP Jonathan Rosenberg. "Larry [Page] often says that we'd be best off if we just showed one ad, the perfect ad," to present the best user experience and the most precisely targeted ad campaigns possible. As a result, the traffic-acquisition cost has stayed steady at around $1.5 billion since last year and has fallen from 39% of total sales to a paltry 28%.

In other words, the online giant is still working on how to make advertisers and consumers alike happier with the Google experience, in the ongoing effort to drive revenue and improve margins in the long run. And there's still plenty of fat to cut out, on top of all the other growth opportunities in Mountain View. A 10% price cut on the stock should be seen as a prime buy-in window, if you ask me.

Low rider
Then there's microprocessor maker and constant underdog Advanced Micro Devices. This time, crummy sales and a big, fat loss were a foregone conclusion, but the magnitude of the fiasco came as a shock even with expectations set at rock-bottom levels.

Intel's (NASDAQ:INTC) success explains most of AMD's pain right now, though an $880 million writedown of ATI goodwill didn't help at all. Wall Street didn't seem to care one way or another that former COO Dirk Meyer stepped up to the CEO position last week. But I think Meyer has been a big part of AMD's return to on-time product releases and the end of slipping timetables. Giving this man the wheel can only mean good things for the company, and those operational improvements should bleed over into sales growth in the next quarter or two.

CFO Bob Rivet promised that AMD would "clearly be profitable in the second half of the year," after reaching breakeven operating income on $1.6 billion quarterly revenue. Yet the Street is acting as if the company is going bankrupt tomorrow, and that's not the case at all. You know the drill.

Mambo No. 5
A little bit of sales growth in the sun, a little bit of earnings miss all night long -- that's how Microsoft swings these days. The long-running Yahoo! (NASDAQ:YHOO) acquisition saga may be winding down, or perhaps simply entering a new stage, but Mr. Softy has a lot of other things to worry about.

You can never really dismiss a company with resources and key market shares as massive as Microsoft's, but the former darling of Wall Street seems to have run out of creative gas. Will Steve Ballmer refocus on Enterprise Software 101? Will he go after virtual servers in a big way? Where does Yahoo! fit into all of this? Nobody really knows, and this stock looks more like a lottery ticket than an investment. If Ballmer makes all of the right moves, there's no reason the company -- and then the stock -- shouldn't perk up once again. But a few badly chosen missteps could lead to disaster in core markets such as office software and operating systems. Tread lightly in Redmond, Fool.

Over and out
Some of these underperformers are victims of larger circumstances, while others might have only themselves to blame. It's up to you to decide which down-on-their-luck companies should be able to pull themselves up by the bootstraps, and which ones are stuck in the mud for real.

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Fool contributor Anders Bylund happily owns shares in AMD and Google but holds no other position in the companies discussed this week. He has learned to love bear markets and cheap stocks. You can see his current holdings for yourself. The Fool has an ironclad disclosure policy.