NVIDIA Corp. (NASDAQ: NVDA) yesterday reported revenue of $903.2 million for the third quarter of fiscal 2010 ended Oct. 25, 2009, up 16 percent from the previous quarter and up slightly from $897.7 million reported in the same period a year earlier. This means that NVIDIA\u2019s fiscal third-quarter profit jumped nearly 75%, helped by higher margins and strong demand for their graphics cards which they were somewhat unable to fulfill.<\/p>\n
NVIDIA\u2019s shares climbed 7.3% to $13.17 in after-hours trading. NVIDIA\u2019s performance far exceeded their expectations and as they continue to predict the next fourth-quarter revenue above analyst estimates.\u00a0 Looking further ahead, CEO Jen-Hsun Huang (aka Jensen) said he is expecting \u201cQ1 to be a pretty exciting quarter for us because we just have so many new products.\u201d<\/p>\n
On a GAAP basis, the company recorded net income of $107.6 million, or $0.19 per diluted share, compared with net income of $61.7 million, or $0.11 per diluted share a year ago. Third quarter GAAP results included a benefit to operating income of $25.1 million related to insurance reimbursements received during the quarter. On a non-GAAP basis — excluding the insurance reimbursements and stock-based compensation, as well as their associated tax impact — net income was $110.3 million, or $0.19 per diluted share, compared with $111.4 million, or $0.20 per diluted share, a year earlier.<\/p>\n
Quarterly Results Highlights\r\n($ in millions except per share data) Q3 FY2010 Q2 FY2010 Q3 FY2009\r\nRevenue $ 903.2 $ 776.5 $ 897.7\r\nGAAP:\r\n Gross margin 43.4% 20.2% 41.0%\r\n Net income (loss) $ 107.6 ($ 105.3) $ 61.7\r\n Income (loss) per share $ 0.19 ($ 0.19) $ 0.11\r\nNon-GAAP: (1)\r\n Gross margin 41.0% 36.3% 41.9%\r\n Net income $ 110.3 $ 37.7 $ 111.4\r\n Income per share $ 0.19 $ 0.07 $ 0.20\r\n ---------- ---------- ----------\r\n(1) See Non-GAAP Measures for an explanation of these figures.<\/pre>\n“We continued to make progress in the third quarter with healthy market demand across the board,” said Jen-Hsun Huang, president and chief executive officer, NVIDIA. “Revenue was up from a year ago, with improvement in each of our PC, professional solutions and consumer businesses. It’s great to see us shipping orders with our Tegra mobile-computing solution, and growing enthusiasm for our Tesla platform for parallel computing in the server and cloud-computing markets.”<\/p>\n
Gross margin, on a GAAP basis, increased to 43.4 percent from 20.2 percent in the previous quarter and 41.0 percent a year earlier. On a non-GAAP basis, gross margin was 41.0 percent, up 4.7 points from the 36.3 percent reported in the previous quarter but slightly off from 41.9 percent a year earlier.<\/p>\n
GAAP net loss for the nine months ended Oct. 25, 2009 was $199.1 million, or $0.36 per share, compared to a net income of $117.6 million, or $0.20 per diluted share for the nine months ended Oct. 26, 2008. Non-GAAP net income for the nine months ended Oct. 25, 2009, which excludes a $93.9 million net charge related to the weak die\/packaging material set that was used in certain versions of our previous generation chips, a non-recurring charge of $140.2 million in connection with a cash tender offer to purchase employee stock options, stock-based compensation charges, and their associated tax impact, was $101.4 million, or $0.18 per diluted share, compared to a net income of $397.7 million, or $0.68 per diluted share for the nine months ended Oct. 26, 2008.<\/p>\n
Outlook<\/p>\n
The outlook for the fourth quarter of fiscal 2010 is as follows:<\/p>\n
-- Revenue is expected to be up slightly, approximately 2 percent, from\r\nthe third quarter.\r\n\r\n-- GAAP gross margin is expected to be in the range of 40 to 42 percent.\r\n\r\n-- GAAP operating expenses are expected to be approximately $305\r\nmillion.<\/pre>\nThird Quarter Fiscal 2010 and Recent Highlights:<\/p>\n
-- First major Tegra(TM) devices shipped: Microsoft's Zune HD and the\r\nSamsung M1.\r\n\r\n-- Held first ever GPU Technology Conference, which was 50%\r\noversubscribed, with 1,500 attendees from 40 countries. More than 200\r\ntechnical sessions were conducted, and presentations were made by 60\r\nemerging companies that utilize the graphics processing unit (GPU).\r\n\r\n-- Introduced the next generation CUDA(TM) GPU architecture, codenamed\r\n\"Fermi.\" The Fermi architecture is the foundation for the world's first\r\ncomputational GPUs, delivering breakthroughs in both graphics and parallel\r\ncomputing.\r\n\r\n-- Oak Ridge National Laboratory announced plans to use Fermi to build a\r\nnew supercomputer, which is designed to be the world's fastest.\r\n\r\n-- Launched the industry's first development environment for massively\r\nparallel computing. The tool, code-named \"Nexus,\" is integrated into\r\nMicrosoft Visual Studio, so that developers will be able to use Visual\r\nStudio and C++ to write applications that leverage Fermi GPUs.\r\n\r\n-- Launched NVIDIA(R) RealityServer(R), a powerful combination of GPUs and\r\nsoftware that streams interactive, photorealistic 3D applications to any\r\nweb connected PC, laptop, netbook or smart phone.\r\n\r\n-- Adobe's new Flash Player 10.1 will be accelerated by GeForce(R),\r\nNVIDIA ION(TM) and Tegra(TM) products, helping to bring uncompromised\r\nbrowsing of rich Web content to netbooks, smartphones and smartbooks.<\/pre>\nConference Call and Web Cast Information<\/strong><\/p>\n
NVIDIA conducted a conference call with analysts and investors to discuss its third quarter fiscal 2010 financial results and current financial prospects yesterday at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time). The Web cast was recorded and is available for replay until the company’s conference call to discuss its financial results for its fourth quarter fiscal 2010.<\/p>\n
You can listen to it here<\/a> or if you prefer, a transcript is available here<\/a> and NVIDIA\u2019s complete news release is here<\/a>.<\/p>\n
Mark Poppin<\/p>\n
ABT Senior Editor<\/p>\n
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