NVIDIA Corporation (NASDAQ: NVDA) earnings show the dual problems of the PC sector. If you are not a fan of caution or if you think you can’t take any more negative news, let’s just say this is disturbing.
For its fourth quarter (end Jan-2009), the revenue disappointment was massive at $481.1 million in sales. This is a 60% drop from the same period a year ago of $1.2 billion. To show how back-end loaded and how fast the drop is here and now, this was a drop of 16% to $3.4 billion for its full year.
Non-GAAP loss was -$0.18. First Call estimates were -$0.09 EPS and $491.36 million in revenue.
The company did not offer any outlook. That’s understandable.
The CEO said, “Our first priority is to set an operating expense level that balances cash conservation while allowing us to continue to invest in initiatives that are of great importance to the market and in which we believe we have industry leadership. We have initiatives in all areas to reduce operating expenses.” In short, despite layoffs and consolidation cost cuts, there might still be more.
This closed down over 4% at $9.32 in normal trading, and shares are down another 7% at $8.68 in after-hours trading.
We panned this one ahead of time in this weekend’s “10 Stocks Under $10” weekly subscriber newsletter. And that was after a very successful trading bounce. The problem for Nvidia is the surging popularity of the lower-end sub-$500 PC. Some of the graphics chipsets run the same price as the lowest of the PC’s themselves.
Jon C. Ogg
February 10, 2009
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