Yesterday, AMD reported their earnings for the second quarter of 2014, with a lot of investors watching to see if AMD can complete their turnaround. They reported a net loss of $36 million even though they had an operating income of $63 million on $1.44 billion in revenue. Their non-GAAP operating income was $67 million and a non-GAAP profit of $17 million with the exclusion of the $49 million loss from debt redemption in the quarter, pushing the company’s GAAP earnings figures into the negative once again. Based upon these figures, this translates to a loss per share of $0.05, slightly more than what some investors and analysts were expecting.

The good news is that AMD’s revenue was up 3% sequentially and 24% year over year, thanks mostly to their increased semi-custom business bringing in vast console revenues. While these revenues are great for AMD, they are still fairly low margin and as a result, AMD’s gross margin is at 35%, nearly half of what Intel’s was last quarter. This margin disparity is partly what differentiates the two companies so drastically financially, but there are a lot of things that really separate the two even though they are the only two vendors of x86 chips for PCs.

Now, looking at AMD’s two different divisions from the last quarter, they had Computing Solutions and GVS (Graphics and Visual Solutions) each reporting increases in revenue and operating profitability. So, if you look at AMD’s business they are actually generating a profit, but due to the fact that they took a $49 million interest charge, they ended up losing money. Computing solutions reported $9 million in operating income on $669 million in revenue while GVS reported $82 million on $772 million in revenue. Clearly, AMD’s computing solutions business still needs some serious work in terms of operating income, but has improved from a $3 million operating loss last quarter. However, AMD’s strongsuit, GPUs, faltered a bit this quarter as they had reported $91 million in operating income last quarter compared to the $82 million this quarter. Most of this decrease was due to lower GPU sales, partially tied to the inevitable slowdown of cryptocurrency mining and the lack of excess demand from that community.

AMD also issued an outlook for Q3 2014 as well as the whole year of 2014. They expect that revenue will grow 2% sequentially, plus or minus 3% (???), which is honestly quite odd because I don’t remember the last time a company’s projected growth was smaller than the swing that they predict. They predict a growth of 2% with a swing of 6% (up 3% or down 3%). Ignoring this bizarre revenue projection, their projects for the rest of the year are incredibly conservative and muted, something their competitors in the same industry aren’t necessarily reporting. After all, there’s no denying that people will always look at Intel and AMD and if Intel is doing well, the expectation is that AMD should be too, unless they’re swapping market share.

However, AMD’s stock plunged 19% after earnings were announced, and today the stock has barely recovered as it currently sits down 16.85% at the time of writing. AMD obviously has a lot of shorts, probably more than almost any other stock in the semiconductor industry. So, whenever there’s bad news, even if not entirely all that bad, the stock seems to plummet. Now, the stock sits beneath $4, once again. The simple moving average for the majority of this year was at or below $4 and unless AMD does something seriously innovative or aggressive I don’t see that stock moving away from $4 any time soon. Upgrade, downgrade or neither, AMD simply does not have anything that can genuinely excite investors until 2016. We will see if AMD can actually complete this turnaround, I’m just not sure people want to keep hearing about non-GAAP profitability quarter over quarter when GAAP is really what gets looked at in a lot of cases. Additionally, I don’t know if AMD can continue to have lukewarm outlooks through 2014 as they don’t appear to have anything heavy hitting quite yet. Not to mention, Intel and Nvidia are not standing still, which means that AMD will not only have to innovate but do it at a faster pace than their competitors if they even want to have a chance in the future.