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Nvidia Reports 17 Percent in Profits in Latest Financial Report

By - Source: Nvidia | B 23 comments

Nvidia's stock had a rocky start on Thursday, as shares fell more than 5 percent following the company's announcement that fourth quarter profit had declined by 17 percent.

Instead of a net income of $171.7 million in Q4 2011, the company reported only $116.0 million. Revenue was up from $886.4 million to $953.2 million.

The company faced declines across all its major business units, which led analysts and investors to react with obvious concern. Tegra 2 sales declined much faster than Nvidia had anticipated and caused the manufacturer's consumer business to nose-dive by 42.5 percent sequentially. The hard disk drive shortage and reduced PC shipments resulted in a 3.6 percent decrease for the GPU business in the same time frame, while the professional business was down 3.6 percent. Earnings were also impacted by a payment to Rambus to settle a patent suit.

Nvidia tried to maintain a positive perspective and noted that "Tegra products shipped in 14 phones, 34 tablets and in 18 of the top 20 carriers." Vice president Rob Csongor noted that Tegra 3 is well-positioned and should deliver "renewed growth". Total Tegra sales in 2011 were about $360 million, Nvidia said. For 2012, the company expects "at least" $540 million, the majority of which will be generated via Tegra 3, CEO Jen-Hsun Huang said.

However, there are additional hurdles Nvidia has to take. Huang noted that the hard disk drive supply issues remain and the shortage of 28-nanometer wafers as well as lower than expected production yields continue, which negatively impacts the company's core GPU business. It does not seem to be an issue that can be resolved anytime soon as Huang explained that "the amount of 28-nanometer capacity in the world is not enough." He expects 28 nm shortages to persist throughout this year.

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Top Comments
  • 24 Hide
    southernshark , February 17, 2012 2:34 AM
    The title is misleading as it makes it sound like Nvidia is doing better, rather than worse.
  • 13 Hide
    elel , February 17, 2012 2:26 AM
    Nice way to get us to read the article - we have to find the rest of the headline :p 
  • 12 Hide
    dudzcom , February 17, 2012 3:19 AM
    looks like they missed the word "decline" between "percent" and "in"
Other Comments
    Display all 23 comments.
  • 13 Hide
    elel , February 17, 2012 2:26 AM
    Nice way to get us to read the article - we have to find the rest of the headline :p 
  • 24 Hide
    southernshark , February 17, 2012 2:34 AM
    The title is misleading as it makes it sound like Nvidia is doing better, rather than worse.
  • 8 Hide
    jasonpwns , February 17, 2012 2:35 AM
    Still reporting profits though.
  • 11 Hide
    doomtomb , February 17, 2012 2:39 AM
    Who are the editors at Tom's again?
    Quote:
    Nvidia Reports 17 Percent in Profits in Latest Financial Report

    This means that 17% of revenue was profit, i.e. surplus after costs are deducted.

    It certainly does not mean this:
    Quote:
    fourth quarter profit had declined by 17 percent

  • 12 Hide
    dudzcom , February 17, 2012 3:19 AM
    looks like they missed the word "decline" between "percent" and "in"
  • 10 Hide
    vaughn2k , February 17, 2012 3:23 AM
    nVidia;
    "... and the shortage of the 28-nanometer wafers as well as lower than expected production yields..."

    Against; --> http://www.tomshardware.com/news/28-nm-TSMC-processing-wafer-foundry,13799.html
    TSMC;
    "... The TSMC's 28-NM process has surpassed the previous generation's (40-NM) production ramps and product yield at the same point in time..."

    Who is telling the truth?
  • 4 Hide
    alidan , February 17, 2012 3:23 AM
    here is something that bugs me.

    a company can only make so much proffit, and can only sell so much before they sell less...
    why do people bail from a company the the moment it makes money, but not as much money as before, but still makeing money?

    and why do we push companies to be like apple where they sell a product for 3-5 times the production cost?

    i will never understand that logic...
  • -1 Hide
    cinergy , February 17, 2012 4:26 AM
    Are people finally coming to their senses and understand that AMD has better bang/buck with GPUs? These "old school" hc geforce guys that think geforce=gfx card are retiring in gaming and younger generation comes in with more open minds.
  • 0 Hide
    lahawzel , February 17, 2012 4:45 AM
    @cinergy: Enthusiast GPU sales don't account for (or at least I would hope it does not) the majority of their revenue. I'd imagine OEM contracts and things like the mobile Tegra chips are where the money rolls in, so what you said is probably not why profits declined.
  • 1 Hide
    phamhlam , February 17, 2012 5:07 AM
    vaughn2knVidia;"... and the shortage of the 28-nanometer wafers as well as lower than expected production yields..."Against; --> http://www.tomshardware.com/news/2 [...] 13799.htmlTSMC;"... The TSMC's 28-NM process has surpassed the previous generation's (40-NM) production ramps and product yield at the same point in time..."Who is telling the truth?


    Both. Nvidia might have expected production to be way more than it's previous generation while TSMC is producing more 28Nm chips at a faster rate but not fast enough for Nvidia I guess.
  • -3 Hide
    amythompson172 , February 17, 2012 6:21 AM
    Theres a simple reason for this, and it is because of this!
    http://www.amazon.com/gp/product/B0046HAW7Y/ref=as_li_ss_tl?ie=UTF8&tag=emjay2d-20&linkCode=as2&camp=1789&creative=390957&creativeASIN=B0046HAW7Y
  • 5 Hide
    spp85 , February 17, 2012 6:56 AM
    AMD is a better profiting company in 2011 as a whole ................
  • 0 Hide
    esrever , February 17, 2012 8:27 AM
    http://semiaccurate.com/2012/02/15/nvidia-comes-somewhat-clean-on-their-quarterly-conference-call/

    why they be losing shares.
  • 0 Hide
    Anonymous , February 17, 2012 9:12 AM
    You know what's worrying about this is that we were all hearing how NVIDIA were waiting on 28nm supplies to be in good amounts before shipping so they could have a good amount of cards to run with yet if this is the case it might indicate that theres going to be no Kepler in 2012. Bad news for everyone :( 

    *Fingers crossed that this is wrong & we see a Kepler release sooner rather then later*
  • 5 Hide
    galaxyy , February 17, 2012 11:21 AM
    I think you accidentally a word there
  • 0 Hide
    southernshark , February 17, 2012 1:29 PM
    I suspect most of the losses relate to the general failure of Tesla 3.
  • 0 Hide
    hannibal , February 17, 2012 1:34 PM
    This mean that 28nm products are going to be guite expensive for a while... Not good...
  • 1 Hide
    maxinexus , February 17, 2012 3:28 PM
    They should already release big K we are all waiting for...
  • 0 Hide
    cybr , February 17, 2012 4:32 PM
    Nvidia is suffering the same downturn that everyone else in the industry is facing due to shortages of drives/etc. Once that is filled, they'll be producing record #'s again. Tegra 3 will be huge.
  • 1 Hide
    southernshark , February 17, 2012 5:30 PM
    cybrNvidia is suffering the same downturn that everyone else in the industry is facing due to shortages of drives/etc. Once that is filled, they'll be producing record #'s again. Tegra 3 will be huge.



    Yeah I'm sure Tegra 3 sales are widely impacted by the shortage of hard drives...........
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