Nvidia, this year's graphics chip company to watch, reported
record revenue and earnings for its second quarter on the strength of
new products and design wins with major computer makers.
Santa Clara, Calif.-based Nvidia reported net income of $22.5 million, or 28
cents per share, nearly four times the net income
of $6.7 million, or 9 cents per share, that it reported for the same period a year ago.
Analysts polled by First Call/Thomson Financial expected the company to
report earnings of 26 cents a share.
While the net income figures included gains from investments, a substantial
part of the gain came from product sales. Operating income for the three
months ended July 31 came to $29 million, slightly more than three times
the $9.5 million in operating income for the same period the year before.
Revenue, meanwhile, came to $170.4 million in the most recent quarter, a 118
percent jump from revenue of $78 million the year before.
The meteoric growth in sales and profits underscores the kind of year Nvidia
is experiencing. While the company has trailed Canada's ATI Technologies in
the market for graphics chips for PCs for the past few years, the company
has landed a number of deals with major PC makers this year that could lead
to a switch in the rankings, analysts have said.
Nvidia's GeForce graphics chips are usually incorporated in
higher-end PCs, while chips from the older TNT family end up in budget PCs.
Nvidia has also managed to lay the groundwork for moving outside the
notoriously competitive market for PC graphics chips. Earlier this fall,
Microsoft selected Nvidia to design a graphics chip and what is believed to be a multimedia chip
for its Xbox game console coming next year. In addition, Nvidia has
announced plans to move into
the Apple market.
Next year, the company will introduce a PC chipset with integrated graphics.
To date, Nvidia has participated in this market through partnerships with
"Nvidia will be able to enter the (integrated graphics and core logic)
market segment without having to incur the costs of major development or
retooling," Jon Peddie, president of Mill Valley, Calif.-based consulting group Jon Peddie Associates, said earlier this month.
"The second quarter of fiscal 2001 was a milestone quarter for Nvidia," CEO Jen-Hsun Huang said in a statement. "Our top-to-bottom product offering continues to expand, as we
completed the rollout of a full line of
GeForce2 GPUs. We are in a terrific position to rapidly expand our market
extend our technological reach well beyond the core consumer market."