Another record quarter for NVIDIA; 3-2 stock split announced.
Thursday 09th August 2007, 11:05:00 PM, written by Geo
Ho hum. Another quarter, and more record results for NVIDIA. In what is typically a seasonally down quarter, the graphics maker obliterated pre-announcement consensus results of $860 million in revenue by throwing down with $935.3 million instead. This is an increase of 36% year over year. Notebook revenue in particular remains strong, scoring an eye-bugging 128% year-over-year increase. GAAP gross margins also continue to improve, posting 45.3% this quarter versus 45.0% last quarter. As a means of historical comparison, ATI, in it's independent days, used to hope for more like 34% gross margins.
NVIDIA claims dominant market-share leadership in 5 catagories, with DX10 (75%) and standalone notebook (68%) being particularly notable. This last number is nearly an exact reversal of the long-time percentage that ATI enjoyed in mobile GPUs.
Taking advantage of all this great news, the company further announced a 3-for-2 stock split effective for owners of record on August 20th. Presumably this benefaction is so that small buyers can temporarily enjoy a lower stock price to buy in at 100 share lots until the next round of wonderful news from the company sends the price higher again.
So much for the good news. Amongst the clouds on the horizon that may or may not bear rain for the parade are a few other factors. The company reports that manufacturing restraints at its foundry partners are beginning to bite. Further, the wonderful current success has reduced inventory from their preferred levels, and thus combined with manufacturing restraints is expected to have some drag on revenue below the normally expected seasonally strong third (back-to-school) and fourth (holiday) quarters.
Also, other parts of the business showed more of the flat results that one would expect from 2Q, with consumer, chipsets, and professional offering strong but not record-making results. Further, that enviable 75% DX10 market-share is in a quarter ending July 29th. In other words, one in which AMD did not have mainstream competitors for much of the quarter to challenge with. One analyst pointed this out and requested comment as to its forward-looking relevance, and was met with an answer Fred Astaire would have been proud to call his own.
So, there is no question that NVIDIA's 2Q results as disclosed today are downright marvelous, and well exceeded most observers expectations. . . but the real shape of the next year or so is much more likely to become apparent with 3Q's results than what was reported today.
NVIDIA claims dominant market-share leadership in 5 catagories, with DX10 (75%) and standalone notebook (68%) being particularly notable. This last number is nearly an exact reversal of the long-time percentage that ATI enjoyed in mobile GPUs.
Taking advantage of all this great news, the company further announced a 3-for-2 stock split effective for owners of record on August 20th. Presumably this benefaction is so that small buyers can temporarily enjoy a lower stock price to buy in at 100 share lots until the next round of wonderful news from the company sends the price higher again.
So much for the good news. Amongst the clouds on the horizon that may or may not bear rain for the parade are a few other factors. The company reports that manufacturing restraints at its foundry partners are beginning to bite. Further, the wonderful current success has reduced inventory from their preferred levels, and thus combined with manufacturing restraints is expected to have some drag on revenue below the normally expected seasonally strong third (back-to-school) and fourth (holiday) quarters.
Also, other parts of the business showed more of the flat results that one would expect from 2Q, with consumer, chipsets, and professional offering strong but not record-making results. Further, that enviable 75% DX10 market-share is in a quarter ending July 29th. In other words, one in which AMD did not have mainstream competitors for much of the quarter to challenge with. One analyst pointed this out and requested comment as to its forward-looking relevance, and was met with an answer Fred Astaire would have been proud to call his own.
So, there is no question that NVIDIA's 2Q results as disclosed today are downright marvelous, and well exceeded most observers expectations. . . but the real shape of the next year or so is much more likely to become apparent with 3Q's results than what was reported today.
Tagging
nvidia ± financial, quarterly
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