A tale of two 3D companies: Nvidia hurdles, 3dfx stumbles in 3Q

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Nvidia (Nasdaq: NVDA) topped analysts by a wide margin in the third quarter, while competitor 3dfx (Nasdaq: TDFX) fell short again.

After market close Thursday, the rival makers of 3D graphics accelerators reported fiscal third quarter results. Nvidia posted net income of $10.6 million, or 29 cents per share. 3dfx reported a net loss of almost $12.2 million, or 50 cents per share, excluding a restructuring charge and writedowns of intangible assets.

Analyst consensus predicted a profit of 23 cents per share for Nvidia and a loss of 45 cents per share for 3dfx, according to Zack's Investment Research.

Third quarter revenue for Nvidia rose to $97 million, an 85 percent gain from $52.3 million in the year-ago period, when the company earned $7.1 million. "We are pleased with our third quarter financial results given the challenges the industry faced during the quarter," said Jen-Hsun Huang, president and CEO of Nvidia, which focuses solely on chipsets. "And I am particularly pleased with our strategic position in the market."

3dfx also saw increased third quarter revenue, to $105.9 million from $33.2 million a year earlier, when the company hadn't yet acquired graphics card maker STB Systems. But higher memory prices, higher-than-expected sales to PC manufacturers as a percentage of business, and costs related to the Taiwanese earthquake all combined to push gross margins lower, said Gordon Campbell, 3dfx chairman.

Thursday's report marks the third straight quarter in which 3dfx missed analyst forecasts. The company's sluggish financial performance this year ultimately led to last month's resignation of Greg Ballard as CEO. 3dfx expects to announce a replacement within weeks, Campbell said.

After closing Thursday's regular trading at 35 13/16, shares of Nvidia rose to as much as 36 15/16 in after hours trading. Shares of 3dfx were down to 9 3/8 in after hours, from a regular close of 10 7/16.>