For investors, AMD (NYSE:AMD) is an interesting story. Its chip business -- which the company calls the Computation Products Group -- is going strong.

Its Opteron, Turion, and Athlon lines are not only driving the sort of technological innovation on the desktop that Intel (NASDAQ:INTC) used to provide, but also turning in record sales amounts and growing the company's operating profits. Unfortunately, AMD's other two product groups -- memory products and personal connectivity solutions -- are creating a drag on the microprocessor business.

The picture may improve in the near future, when AMD's money-losing and capital-intensive flash memory business, which has been merged with Fujitsu's flash business, goes public under the name Spansion. Until then, AMD gets to haul the flash business around on its financial statements.

On the whole, AMD reported flat sales and negative income from operations, but it did turn in earnings per share of $0.03 because some of its minority interests turned profits. However, there are questions about the quality of these earnings, since inventory growth (at 25.5%) and receivables growth (38.8%) far outpaced the growth in sales, which at -0.2% wasn't growth at all.

For investors like me who love free cash flow, you'll have to wait for the company's 10-Q, since AMD doesn't provide that statement in its press release. However, judging by the company's reconciliation to EBITDA, it doesn't seem that free cash flow was anything to get too excited about, thanks to large capital investments.

A large chunk of these capital expenditures went toward the expansion of the company's microprocessor fabrication center in Germany. However, the interesting question for investors is how much free cash flow starts to trickle in once the microprocessor and memory businesses are separated from each other and the possibility of a value opportunity begins to open up.

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Nathan Parmelee has no financial interest in any of the companies mentioned. The Motley Fool has an ironclad disclosure policy.