NVIDIA Loses $141 Million in Q2 of FY 2011

By on August 13th, 2010 06:26 GMT

Even though a significant number of companies have posted favorable financial results for the second quarter of their FY 2011, and for July in particular, certain unfavorable conditions, such as slow GPU demand and a charge related to the die/packaging material set, led to NVIDIA's revenues dropping 19% sequentially.

NVIDIA already lost a lot of ground to AMD because it brought out its DirectX 11 products quite late, and it still hasn't managed to regain all of it.

The GeForce GTX 460 seems to be contributing to the recovery, but there seem to be certain factors that don't allow this to happen very easily.

For once, demand for graphics processing units (GPUs) dropped, causing a large inventory write-down.

The other issue has actually been plaguing GPUs since before July 2008 and comes in the form of a charge caused by a weak die/packaging material set.

All in all, NVIDIA's Q2 FY 2011 revenues amounted to $811.2 million, which is, somehow, 4.5% more than last year but 19% less sequentially.

Overall, this corresponds to a net loss of $141 million, not exactly an encouraging figure, especially considering that the forecast for the current quarter only implies a growth of 3 to 5% over Q2.

"Rapidly changing market conditions made for a challenging quarter," said Jen-Hsun Huang, NVIDIA's CEO and president.

"We delivered excellent results in Quadro professional graphics, Tesla GPU computing, and our Tegra system-on-a-chip business. But our GeForce consumer business fell significantly short of expectations amid weak PC demand in Europe and China,” Huang added.

“Although demand among end-users remains uncertain, we expect to drive revenue and grow market share with new products that are gaining momentum in each of our businesses," he concluded.

NVIDIA's prediction for Q3 is as 'modest' as it is because the company still has to deal with concerns regarding the insecure consumer PC market.

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