CEO Hector Ruiz, increasingly blamed for the harrowing of AMD, stepped down during the company’s Q2 conference call with Wall Street Thursday in favor of his sidekick, AMD president and patent-carrying engineer Dirk Meyer, the guy who used to run AMD’s chip operation and was responsible for the Opteron chip that brought grief to Intel.

Since the two have been so closed aligned it is unclear whether the change will make any substantive difference in AMD’s fortunes.

Ruiz was ultimately responsible for AMD’s questionable and very expensive acquisition of ATI, much of which has been written off by now, while the Barcelona quad-core chip on which the fate of the company hung proved so complicated it was a year late, squandering its edge.

He will remain with the company as executive chairman to finalize its still mysterious asset-lite strategy on which much of its future is now supposed to hang and to pursue the massive and pricey antitrust suit that the company brought against rival Intel during his tenure.

When asked what strategic redirection he would take to achieve AMD’s now mythic “sustained profitability,” Meyer said he would “focus more narrowly on volume sweet spots” in server and PC chips and “execute, execute, execute.”

He thinks the company is “not living up to its potential” and it appears he will push one- and two-socket chips.

The company continues to claim that it will turn profitable, at least on an operating basis in the second half – or maybe now it’ll be the first quarter, it suggested at one point – after racking up billions in losses the last seven quarters.

AMD said Thursday that it lost $1.19 billion, or $1.96 a share, in Q2 on lower-than-expected revenues of $1.38 billion, down 7% sequentially. It described it as a “tough quarter,” with a resulting margin of 52%.

Wall Street was expecting a loss of 52 cents or at least it was since last Friday when AMD said it would lose $318 million on sales of $1.5 billion.

This time last year it lost $524.4 million, or 95 cents a share, on revenues of $1.4 billion.

Last Friday it warned that it was going to take a one-time charge of – ouch! – $948 million in Q2: a $880 million impairment charge related to its $5.4 billion acquisition of ATI, another $32 million because of recent layoffs made in search of a lower breakeven point and still another $36 million related to the poor performance of its flash joint venture Spansion and its holdings in auction rate securities.

The catastrophe was offset by a $190 million gain from the anticipated sale of older 200mm wafer-making equipment.

The ATI mess – and AMD wrote off $1.7 billion late last year because of ATI – was attributed to ATI’s struggling handheld and DTV units, non-core parts of the business that AMD now says it will sell off since sales dropped 46% to $37 million, with an operating loss of $42 million. It did not explain how it would pull off the divestiture.

The news depressed AMD’s stock to levels not seen in 16 years.

AMD said overall MPU sales of $1.16 billion were flat year-over-year in Q2 and down 8% sequentially because of weaker client sales although quad and three-core server chips were up 5%. ASPs were down because it was dumping older products. AMD said the chip unit lost $269 million.

ATI, the unit responsible for much of its financial plight did $248 million in sales, down 5% sequentially, and lost $38 million.

All AMD could say about its outlook was that it expected a revenue increase in line with seasonality. It is struggling to reduce its breakeven point which now may be $1.5 billion or $1.6 billion.

AMD continues to refuse to describe its vaunted – and by this time practically legendary – asset-lite strategy that it’s been dangling in front of investors for over a year now.

Ruiz said Thursday it might become clear by the end of the year and described it was “unique to AMD,” “the reformation of the company” and “more complex than simply outsourcing” manufacturing.

It has been assumed the company might sell off its fabs. Whatever it is the deals are taking a long time to cut.