AMD lost $396 million, or 71 cents a share, in the September quarter on revenues of $1.63 billion, up 18% sequentially and up 23% year-over-year. Its operating loss was $226 million.

Those losses, better than last quarter when it lost $600 million, were nine cents heavier that Wall Street expected but revenues were $100 million better than figured too.

AMD took a $120 million charge, accounting for 22 cents of the losses and attributed to its pricey $5.6 billion ATI acquisition, integration and severance charges and impairment of its Spansion assets. If you exclude the charges, it did better than it was supposed to.

Despite the red ink, AMD found the results encouraging because of the revenue increase, a gain of eight points of gross margin to 41% - though still down 10 points year-over-year - and the halving of its operating losses.

Its microprocessor shipments were up 16% sequentially and processor revenues were up 19%. AMD's chip unit did $1.28 billion.

It said a record number of microprocessors moved through its distribution channel - note through distribution - and of course it started revenue shipments of the ballyhooed quad-core Barcelona, but Barcelona's ramping slower than expected - due to tuning the design to the process - and so had no material impact on the quarter, AMD said.

In fact AMD thinks it may have lost a point in server share, ground it expects to regain this quarter with the shipment of "hundreds of thousands" of Barcelonas as opposed to "tens of thousands."

It claimed the market was "licking their chops" for Barcelona and that demand was heavy. Still it described this quarter as a "client quarter," because of the holidays.

It thinks it may have gained share in mobile - probably at the low end - and said desktop was "too close to call." Its mobile processor shipments were up 41% sequentially and 68% year-over-year.

AMD's ASPs declined in servers but were up in both desktops and mobile, enough for AMD to say they were up "overall" - while Intel's were flat - so evidently there's been something of a lull in the price wars, which are likely to start up again when Barcelona hits volume and AMD gets a 2.5GHz chip.

Like Intel it reported finding no evidence of double booking and expects inventories to be drained by the end of this quarter.

The company made no projections for this quarter other than to say revenues should increase in line with seasonality. It even deferred to Intel, with its superior visibility, in defining seasonality.

AMD needs to clear $2 billion in revenues and a gross margin north of 40% to break even, its goal for this quarter. It figures it's got a chance. Wall Street thinks it'll lose 33 cents on $1.7 billion. CEO Hector Ruiz won't discuss the plan for getting back on track. It's too soon, he says.

As far as AMD's ATI acquisition goes, graphics revenues were up 29% sequentially to $252 million. It only lost $3 million. That's $47 million better than last quarter.

• Raise your hand if you use the same password for more than one online account