We have gone through a very difficult time, reacted quickly and decisively, and we are on our way to really have, I believe, a phenomenal transition year in 2008.”

– AMD CEO Hector Ruiz, December 2007

2008 hasn’t quite proven to be the “phenomenal transition year” AMD believed it would be. Despite new leadership and a restructuring of its manufacturing assets, the company was not able to return to profitability by the third quarter of 2008 as it had hoped. And now, AMD (AMD) has reported a greater-than-expected net loss for the fourth quarter of 2008–its ninth consecutive one. A grotesque 33 percent drop in revenue left the company awash in $1.4 billion of red ink.

“The fourth quarter of 2008 is going to be remembered for the severe stresses placed on the global economy and on our industry,” AMD CEO Dirk Meyer told analysts. “The global economic environment led to a softening in end-customer demand for PCs and servers in what is usually the year’s strongest quarter. The reality of today’s global economy require that we redouble our focus on cash management and cash flow control, and we will do so while protecting assets.”

Suffice to say, AMD did not offer a specific forecast for its current quarter, saying only that it expects sales to continue to trend lower “in light of the current macroeconomic conditions, very limited visibility and continued corrections in the supply chain.” Shares in the company, which have lost more than 50 percent of their value since the start of the fourth quarter, closed down nearly 10 percent on the news, although they seem to be recovering today.

Ruiz announced the leadership change during AMD’s second-quarter financial earnings conference call. “The time is right to turn the company over to a new leader,” he said. And, given the company’s ugly $1.19 billion second-quarter loss, he would appear to be right. “We have not been living up to our potential,” Meyer said during a conference call. “Looking forward, we will. We will demand a pattern of sustained profitability…We will execute, execute and execute.”

Presumably, Meyer is refering to the company’s mission here and not AMD employees who’ve suffered enough already, I think.

The new server chip, which puts four processors on a single silicon die, is the first of its kind and AMD’s shot at regaining some of the market its lost to a resurgent Intel. The company’s market share was about 25% in the middle of 2006. By mid-2007, it had slipped to close to 13%. “There is nothing that we would have been more excited about than getting it out earlier,” AMD CEO Hector Ruiz told eWeek. “But you know we are not making excuses. This is a damn difficult thing to do, as I’m sure you can imagine. …This is 600 million transistors on a chip, four cores, complex technology and tremendous architectural features. It was, frankly, a little tougher challenge than we had anticipated and it frustrated the hell out of us because we wanted to get it out there earlier.”

Of course you did. The Quad-Core AMD Opteron arrives at market nearly a year after Intel began shipping quad-core processors of its own and follows a string of consecutive quarterly losses. The stakes here have been high for quite a while. But is the quad-core Opteron the winning hand for which AMD hopes? Perhaps. Perhaps not. “Barcelona is not the sweeping challenge to Intel they wanted to make,” analyst Rob Enderle told the Austin American Statesman. “This keeps them in the game and competing. But it’s not a leadership position.”

Certainly, Intel doesn’t think so. This morning the company announced that it now expects third quarter revenue to be between $9.4 billion and $9.8 billion, improving on its previous guidance of $9 billion to $9.6 billion.