On Oct. 18, microprocessor maker Advanced Micro Devices (NYSE:AMD) released third-quarter earnings for the period ending Sept. 29, 2007.

  • They weren't pretty but could have been much worse. Gross margins were about 8 percentage points worse last quarter, and the net loss was about 33% lower.
  • Operating cash flow is back to the cheery levels of yesteryear already, although hefty capital expenses ensure that the cash balance trickles downward regardless.
  • These financial troubles are AMD's alone and not the industry's; note how AMD's prominent competitors remain profitable and get more CAPS respect.

(Figures in millions, except per-share data.)

Income Statement Highlights

Q3 2007

Q3 2006

Change

Sales

$1,632

$1,328

22.9%

Net Profit

($396)

$136

N/A

EPS

($0.71)

$0.27

N/A

Diluted Shares

554

497

11.5%

Get back to basics with the income statement.

Margin Checkup

Q3 2007

Q3 2006

Change*

Gross Margin

41.0%

51.4%

(10.4)

Operating Margin

(13.9%)

9.0%

(22.8)

Net Margin

(24.3%)

10.1%

(34.4)

*Expressed in percentage points.

Margins are the earnings engine.

Balance Sheet Highlights

Assets

Q3 2007

Q3 2006

Change

Cash + ST Invest.

$1,528

$2,357

(35.2%)

Accounts Rec.

$682

$688

(0.9%)

Inventory

$839

$466

80.2%

Liabilities

Q3 2007

Q3 2006

Change

Accounts Payable

$1,064

$901

18.0%

Long-Term Debt & Capitalized
Lease Obligations

$5,117

$3,672

39.4%

The balance sheet reflects the company's health.

Cash Flow Highlights

Q3 2007

Q3 2006

Change

Cash From Ops.

$223

$230

(3.0%)

Capital Expenditures

$419

$425

(1.4%)

Free Cash Flow

($196)

($195)

(0.7%)

Owner Earnings

($481)

($91)

(428.5%)

Free cash flow is a Fool's best friend.

Competitive Context

Market Cap

P/E Ratio

CAPS Rating

AMD

$8,040

N/A

**

Intel (NASDAQ:INTC)

$157,500

27.7

***

NVIDIA (NASDAQ:NVDA)

$21,700

41.0

*****

Sun Microsystems (NASDAQ:JAVA)

$21,230

45.8

***

QUALCOMM (NASDAQ:QCOM)

$69,330

25.2

***

The latest reported numbers from Capital IQ. Nobody is anybody without some context.

Related Foolishness:

Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean.

Intel is a Motley Fool Inside Value selection and NVIDIA is a Stock Advisor pick. Learn more with a free, 30-day trial pass to any of our market-beating newsletter services.

At the time of publication, Anders Bylund was an AMD shareholder, but had no other position in any company mentioned. It kind of smarts to have to cheer the competition on like this, you know. Fool rules are here.