Chip maker Advanced Micro Devices reported today that its first quarter results beat expectations, but the company had a big loss of $590 million. While AMD is very competitive with its product line-up, the results show that it’s not easy to keep waging in the unending war with Intel, the world’s biggest chip maker. Worth noting is that the loss is due not to operations but to an accounting charge.

Revenue for the quarter was $1.59 billion, down 2 percent from a year ago. The loss of $590 million amount to 80 cents a share. Analysts had expected revenues of $1.56 billion. The loss included a $703 million charge related to a change to the valuation of AMD’s equity in Globalfoundries, a contract chip manufacturer that AMD spun off. The charge is not completely a cash charge. In the first quarter a year ago, AMD had a $492 million gain on the valuation of the Globalfoundries ownership.

If you take the accounting charge out, then AMD had a good quarter, with a non-GAAP profit of 12 cents a share, or $92 million, compared to analysts’ estimates of 9 cents a share. It’s not clear if everyone will be able to see that in AMD’s overall picture.

The charge is due to a change in the exclusivity of certain 28-nanometer chips from Globalfoundries and other smaller matters. AMD no longer owns a stake in Globalfoundries.

“AMD delivered solid results in the first quarter as we remain focused on improving our execution, delivering innovative products, and building a company around a strategy to deliver strong cash flow and earnings growth,” said Rory Read, AMD president and CEO. “A complete top-to-bottom introduction of new APU offerings, combined with ample product supply resulting from continued progress with our manufacturing partners, positions us to win and grow.”

AMD has a healthy $1.7 billion in cash. In the quarter, it used $281 million to purchase micro-server maker Sea Micro. Average selling prices declined sequentially and were flat compared to a year ago. In a conference call with analysts, Read said the company has been improving its execution and is better positioned to take advantage of its opportunities. AMD is launching its Brazos 2.0 chips for laptops in the second quarter. That should give the company a boost in the fast-growing notebook market. In the second quarter, Sunnyvale, Calif.-based AMD expects revenue to increase 3 percent.

Read said customers will launch a record number of AMD-based laptops in the current quarter, thanks to Brazos 2.0.

In the past, AMD’s chips haven’t had the combination of low-power consumption and processing power. Instead, AMD created fast and brainy chips that could be used in everything from laptops to desktops and servers. But the chips ran too hot to be used in the tiny enclosures of tablet computers.

The first tablet chip coming this year is code-named Hondo. It will combine a microprocessor and graphics in the same chip in a solution that AMD calls an accelerated processing unit, or APU. The Hondo chip will be made with a 40-nanometer manufacturing process and will feature ultra-low-power consumption.

AMD has been chasing Intel for a long time and now faces competition from ARM-based rivals in tablets. But AMD is in a much healthier financial state than it has been in the past; the company has more than $2 billion in debt, but it generates more than $500 million in free cash flow so it can continue to pay down that debt.

The code-named Brazos 2.0 chip has a faster TurboCore and universal serial bus 3.0 capability in a 40-nanometer solution. AMD will also launch Trinity, a second-generation APU built with a more advanced 32-nanometer process. That will feature significant performance and power improvements. And AMD will also debut its Southern Islands stand-alone graphics chip this year, which has a next-generation graphics core and other cool features. It will be built with AMD’s most advanced 28-nanometer process.