14 DAY TRIAL // NVIDIA, a leading manufacturer of graphics cards, has registered a rather bad third quarter this year, as showed by the announced quarterly earnings. Even so, while the profits went down compared to last year, the revenue the company registered is better than what was forecast. The green manufacturer ended on October 26 the three month period, and registered profit down by 74 percent to $61.7 million (11 cents per share) from last year's $235.7 million profit.
Still, if the costs from stock compensation and other expenses are excluded, earnings raise to 20 cents per share, which is considerably higher than the average estimation of 11 cents made by First Call. The revenue dropped 20 percent from $1.12 billion a year earlier to $897.7 million.
In Q3 2008, NVIDIA registered an $8.3 million charge against operating expenses connected with restructuring costs and workforce reduction. In September, the graphics card manufacturer announced its plans to reduce its workforce by 6.5 percent. The company also recorded market share loss in favor of ATI, the graphics unit of Advanced Micro Devices. ”We lost some market share recently. We're focused on regaining market share,” said Jen-Hsun Huang, president and CEO of NVIDIA.
The Santa Clara-based has been reported to shift to the more advanced 55-nanometer manufacturing process from the current 65-nanometer process on its “performance segment” graphics chips during the third quarter. “We were caught flat footed at 65 (nanometer) and our chip and board solution was just too expensive. We've made that transition (to 55 nanometer) in Q2. And in Q3 we're through that transition and we're off and running,” stated Huang.
NVIDIA seems somehow concerned by the desktop segment. “The big swing factor in all of this is what happens to desktop revenue. We're focused on regaining some market share in that area,” said Marvin D . Burkett, chief financial officer with NVIDIA. “Caution tells me it could be a weak market in the fourth quarter,” he added.
The green company also has plans to gain share in the high-growth laptop segment. During the third quarter, NVIDIA released the new GeForce 9400M mobile chipset, which is the first notebook chipset the manufacturer makes for Intel processors, according to Huang. “This is a very important growth opportunity for us. For the first time we have exposure to the vast majority of this fast-growing segment of the PC industry,” stated Huang.