Advanced Microdevices inc. (NASDAQ: AMD) is out with yet another strange and convoluted earnings report. The report contains sequential gains in revenues, but with a loss, and a sharp drop in revenues from the prior year. Guidance for revenues also calls for sales to drop 10% or so. Where the report gets cloudy is that it is announcing a joint venture that includes a restructuring to even further lower AMD’s operating expense structure.

The company reported a third quarter net loss of $0.17 per share on $1.06 billion in revenue compared to consensus estimates of a net loss of $0.12 per share on $996 million in revenue. The same period from the previous year had $0.05 in earnings per share on $1.43 billion in revenue.

The company reported a gross margin of 23%, which was down 5 percentage points sequentially, due to an inventory write-down of $65 million.

AMD’s joint venture will be with Nantong Fujitsu Microelectronics Co., Ltd. It is said to be a $436 million agreement which combines AMD’s high-volume ATMP facilities with Nantong Fujitsu Microelectronics’ OSAT expertise, and is said to be the latest step in AMD’s strategic transformation.

AMD will contribute its Penang and Suzhou assembly and test manufacturing facilities, and will include roughly 1,700 employees and its local management team. Nantong Fujitsu Microelectronics is shown to be taking an 85% ownership stake and will serve as the controlling shareholder of this venture.

For all of this, the group will end up paying AMD about $371 million in cash. Upon closure, AMD said that it expects the transaction to be “cost neutral” with significantly reduced AMD capital expenditures.

Dr. Lisa Su, AMD President and CEO, commented on earnings:

AMD delivered double-digit percentage sequential revenue growth in both of our segments in the third quarter. We continue to take targeted actions to improve long-term financial performance, build great products and simplify our business model. The formation of a joint venture of our back-end manufacturing assets is a significant step towards achieving these goals and strengthening our balance sheet.

On the books the company had $755 million in cash, equivalents and marketable securities at the end of the third quarter compared to $1.04 billion at the end of December 2014.

Shares of AMD closed Thursday up 1% at $1.97, with a consensus analyst price target of $2.24 and a 52-week trading range of $1.61 to $3.37. Following the release of the earnings report, shares were up 1.5% at $2.00 in the after-hours trading session.

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