nVidia profit down 74% in Q3

MarcVenice

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Thats with how many million being reserved for those faulty laptop videocards? Revenue being down a FAIR bit is interesting though ...
 

IlllI

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Feb 12, 2002
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his link got messed up Text

but this kind of post is bound to rile up some people

*grabs popcorn*

 

Spike

Diamond Member
Aug 27, 2001
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Hmmm, market down in general, nvidia down specifically due to market, defective parts and lower sales... might be time to buy some of their stock. They are essentially a solid company so it's bound to pay off eventually.
 

MarcVenice

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Market down in general ? Who are you kidding ? Market is UP more then ever. Total sales by nvidia, AMD and Intel have increased, discrete graphic cards as well as graphic chipsets ...
 

BenSkywalker

Diamond Member
Oct 9, 1999
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Market down in general ? Who are you kidding ?
Companies can go through a process called going public. When they go public, they divide ownership up into small shares commonly called stocks. These stocks are traded on various exchanges called markets. Those markets are down sharply.
 

nRollo

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Originally posted by: clandren
his link got messed up Text

but this kind of post is bound to rile up some people

*grabs popcorn*
If they don't own NVIDIA stock or work for NVIDIA, I don't know why it would.

Even for those people, profits being down>>>>>>>losses, so they may take this as good news given the economic climate in general. Not a lot of firms are having great Q3s these days.
 

ViRGE

Elite Member, Moderator Emeritus
Oct 9, 1999
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I'm a bit surprised they turned a profit; the way their warning earlier this year was written, it sounded like this was going to be an unprofitable quarter. What's strange is that their gross margin is up compared to Q2, 42% to 39%.
 

IlllI

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Feb 12, 2002
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Originally posted by: nRollo


If they don't own NVIDIA stock or work for NVIDIA, I don't know why it would.

Even for those people, profits being down>>>>>>>losses, so they may take this as good news given the economic climate in general. Not a lot of firms are having great Q3s these days.

people loyal to one brand like it with their 'rival' company isnt doing well.

 

MarcVenice

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Apr 2, 2007
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Originally posted by: BenSkywalker
Market down in general ? Who are you kidding ?
Companies can go through a process called going public. When they go public, they divide ownership up into small shares commonly called stocks. These stocks are traded on various exchanges called markets. Those markets are down sharply.
Hmm, wait, I thought he ment the GPU market. Thank you for your sarcastical reply.

Then theoretically he is correct, but it's irrelevant. The GPU market in general is up, in contrast to the 'general' market which is indeed down. There's no excuse for Nvidia to drop the ball when other GPU company's manage to actually increase sales, driving total sales past that of the previous quarter.

http://news.cnet.com/8301-13924_3-10075631-64.html

So, care to comment again, BenSkywalker?
 

BenSkywalker

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Oct 9, 1999
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Thank you for your sarcastical reply.
There wasn't sarcasm, you seem to have a bit of trouble when it comes to economic data.

Then theoretically he is correct, but it's irrelevant. The GPU market in general is up, in contrast to the 'general' market which is indeed down.
No theory behind anything- he is correct.

There's no excuse for Nvidia to drop the ball when other GPU company's manage to actually increase sales, driving total sales past that of the previous quarter.
Based on the chart in your link laptop GPUs accounted for 33.4Million units shipped in the previous quarter, of that nVidia had a 23.6% marketshare- 7.88M units. In this quarter nV had 21.8% of a market of 49.4Million units- 10.77M units. Do you have some other link that demonstrates what you are trying to say?

We could get into significantly reduced margins for nV parts due to increased competitive pressures and the broader economic downturn, maybe even get into how the ASP could see a significant decline since they no longer monopolize the upper echelon of the pricing range.

When we make it far enough we can take a look at nV's liquidity, where they keep their 'cash' reserves tied up and how that could have a significant impact on their absolute numbers in terms of the balance sheets. That is getting a bit ahead of ourselves though, have to start with understanding how marketshare relates to raw sales data first :)

Seriously, people who want to talk about financials should keep in mind exactly how they tie in with Video Cards in general. For those that want to focus on the negative for nV- they turned a larger profit this quarter then AMD has for the last five years combined(by a HUGE margin). Bad financial statements are a very relative thing. At the end of the day, the only reason to discuss financials on a tech forum is people looking at the investment potential or grasping long term viability. nV once again trounced AMD's financial reports- does it make the slightest bit of a difference? Nope, actually- I'd much rather see AMD performing closer to nVidia then they have been, makes sure we keep competition that way.
 

rjc

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Sep 27, 2007
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Originally posted by: ViRGE
I'm a bit surprised they turned a profit; the way their warning earlier this year was written, it sounded like this was going to be an unprofitable quarter. What's strange is that their gross margin is up compared to Q2, 42% to 39%.
I was wondering about that to, then i found the earnings call transcript which talks about how they sold $75m of MCP79 chipset presumably to apple and others at quite a high margin. Their workstation stuff seems to have gone fairly well, and the sony licensing revenue also made things good.

It was interesting as they also say in the future MCP will tend back towards high volume, low margin type business and thus they want to get more of the desktop discrete GPU business back, even though it is not growing cause of the relatively high margins available.

Some CEO quotes:
"we were caught flat footed at 65nm and our chip and board solution was just too expensive"

"We have 65nm inventory remaining, but everything we are ramping now is 55nm; and everything on the high-end that we are shipping now is 55nm."

"And finally, this quarter we will announce a groundbreaking product that is starting to create buzz throughout the industry. Stereoscopic 3-D glasses for GeForce."


 

MarcVenice

Moderator Emeritus <br>
Apr 2, 2007
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Originally posted by: BenSkywalker
Thank you for your sarcastical reply.
There wasn't sarcasm, you seem to have a bit of trouble when it comes to economic data.

Then theoretically he is correct, but it's irrelevant. The GPU market in general is up, in contrast to the 'general' market which is indeed down.
No theory behind anything- he is correct.

There's no excuse for Nvidia to drop the ball when other GPU company's manage to actually increase sales, driving total sales past that of the previous quarter.
Based on the chart in your link laptop GPUs accounted for 33.4Million units shipped in the previous quarter, of that nVidia had a 23.6% marketshare- 7.88M units. In this quarter nV had 21.8% of a market of 49.4Million units- 10.77M units. Do you have some other link that demonstrates what you are trying to say?

We could get into significantly reduced margins for nV parts due to increased competitive pressures and the broader economic downturn, maybe even get into how the ASP could see a significant decline since they no longer monopolize the upper echelon of the pricing range.

When we make it far enough we can take a look at nV's liquidity, where they keep their 'cash' reserves tied up and how that could have a significant impact on their absolute numbers in terms of the balance sheets. That is getting a bit ahead of ourselves though, have to start with understanding how marketshare relates to raw sales data first :)

Seriously, people who want to talk about financials should keep in mind exactly how they tie in with Video Cards in general. For those that want to focus on the negative for nV- they turned a larger profit this quarter then AMD has for the last five years combined(by a HUGE margin). Bad financial statements are a very relative thing. At the end of the day, the only reason to discuss financials on a tech forum is people looking at the investment potential or grasping long term viability. nV once again trounced AMD's financial reports- does it make the slightest bit of a difference? Nope, actually- I'd much rather see AMD performing closer to nVidia then they have been, makes sure we keep competition that way.
I'm not sure what you are getting at ? I mistook his first use of the word market, and then corrected myself. I don't see why Nvidia's stock should be down, just because the other stocks are down as well, when in comparison, the GPU market, in terms of sales, is thriving.

The link I gave you shows that sales have been going up, and nvidia's marketshare has been going down. And that explains why there revenue went down, doesn't it, in a market that's actually growing? That's not so hard to understand, right?
 

nRollo

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Originally posted by: MarcVenice
The link I gave you shows that sales have been going up, and nvidia's marketshare has been going down. And that explains why there revenue went down, doesn't it, in a market that's actually growing? That's not so hard to understand, right?
I'm guessing a 3% overall drop in GPU marketshare didn't account for a 74% drop in profits. Ben seems pretty close to the mark in his assessment of finances to me.

I also think discussing "less profits for NVIDIA" in a year where their main competitor decided slash the price of their high end product to 1999 levels in an effort to win back some marketshare is fairly pointless. Profits are down largely because margins are.

He's also right about NVIDIA's profits this quarter being higher than AMD's (and I believe ATI's) for years, so if the point is "Haha! NVIDIA is making less millions!" it's sort of a hollow victory.

AMD may make more per chip due to the smaller die size, but I still think their firesale prices did them and the industry no favors. I don't think it's a sustainable strategy, and no one is going to convince me that we'll see the same kind of vendor features (warranty, step ups), product quality (compare the look and feel of a 9800GTX+ to a 4850- the 4850 seems like something from days long gone) and R&D for a market where "Yippie skips our highest end GPU is going to sell for what they did back in Voodoo 1 days and all of our expenses are only twice as much!".

Do people honestly believe that ATi shrinking their die made it possible for them to make the same profit selling $300 cards as they made previously selling $500 cards? Why? There have been die shrinks before, this is the "magic" one that makes huge margins possible when every other expense they have is much higher than it was?

My dad told me early on "There's no such thing as a free lunch" and when you take the profits out of a business the innovation and investment into it don't remain constant. Companies invest money where the profit is, and people who believe AMD likes selling 4870s for what they sold Radeon 1 VIVOs for are in for an awakening.

We should all be wishing both NVIDIA and AMD were making 100s of millions, because the current trend is a race to the bottom like so many other markets in our economy.
 

nRollo

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Jan 11, 2002
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Originally posted by: rjc


"We have 65nm inventory remaining, but everything we are ramping now is 55nm; and everything on the high-end that we are shipping now is 55nm."

"And finally, this quarter we will announce a groundbreaking product that is starting to create buzz throughout the industry. Stereoscopic 3-D glasses for GeForce."
This is impossible- Charlie at The Inquirer said the GT200B is delayed for another respin till next year. Jen Hsun must have been mistaken and not read his article.

;)

Note: This should not be construed as me saying I know anything about GT200B, I just find it interesting NVIDIAs CEO says they're shipping all high end parts at 55nm, and Charlie says all 55nm parts are on hold.

Who to believe, who to believe? Arrgghhh...brain hurting...Charlie...FUD....conference call.......conflicting info....

<head explodes>

:D
 

aldamon

Diamond Member
Aug 2, 2000
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Originally posted by: nRollo
Originally posted by: MarcVenice
The link I gave you shows that sales have been going up, and nvidia's marketshare has been going down. And that explains why there revenue went down, doesn't it, in a market that's actually growing? That's not so hard to understand, right?
I'm guessing a 3% overall drop in GPU marketshare didn't account for a 74% drop in profits. Ben seems pretty close to the mark in his assessment of finances to me.

I also think discussing "less profits for NVIDIA" in a year where their main competitor decided slash the price of their high end product to 1999 levels in an effort to win back some marketshare is fairly pointless. Profits are down largely because margins are.

He's also right about NVIDIA's profits this quarter being higher than AMD's (and I believe ATI's) for years, so if the point is "Haha! NVIDIA is making less millions!" it's sort of a hollow victory.

AMD may make more per chip due to the smaller die size, but I still think their firesale prices did them and the industry no favors. I don't think it's a sustainable strategy, and no one is going to convince me that we'll see the same kind of vendor features (warranty, step ups), product quality (compare the look and feel of a 9800GTX+ to a 4850- the 4850 seems like something from days long gone) and R&D for a market where "Yippie skips our highest end GPU is going to sell for what they did back in Voodoo 1 days and all of our expenses are only twice as much!".

Do people honestly believe that ATi shrinking their die made it possible for them to make the same profit selling $300 cards as they made previously selling $500 cards? Why? There have been die shrinks before, this is the "magic" one that makes huge margins possible when every other expense they have is much higher than it was?

My dad told me early on "There's no such thing as a free lunch" and when you take the profits out of a business the innovation and investment into it don't remain constant. Companies invest money where the profit is, and people who believe AMD likes selling 4870s for what they sold Radeon 1 VIVOs for are in for an awakening.

We should all be wishing both NVIDIA and AMD were making 100s of millions, because the current trend is a race to the bottom like so many other markets in our economy.
Thank you. The 48xx has been great for customers but the prices don't make any sense.
 

MarcVenice

Moderator Emeritus <br>
Apr 2, 2007
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Originally posted by: nRollo
Originally posted by: MarcVenice
The link I gave you shows that sales have been going up, and nvidia's marketshare has been going down. And that explains why there revenue went down, doesn't it, in a market that's actually growing? That's not so hard to understand, right?
I'm guessing a 3% overall drop in GPU marketshare didn't account for a 74% drop in profits. Ben seems pretty close to the mark in his assessment of finances to me.

I also think discussing "less profits for NVIDIA" in a year where their main competitor decided slash the price of their high end product to 1999 levels in an effort to win back some marketshare is fairly pointless. Profits are down largely because margins are.

He's also right about NVIDIA's profits this quarter being higher than AMD's (and I believe ATI's) for years, so if the point is "Haha! NVIDIA is making less millions!" it's sort of a hollow victory.

AMD may make more per chip due to the smaller die size, but I still think their firesale prices did them and the industry no favors. I don't think it's a sustainable strategy, and no one is going to convince me that we'll see the same kind of vendor features (warranty, step ups), product quality (compare the look and feel of a 9800GTX+ to a 4850- the 4850 seems like something from days long gone) and R&D for a market where "Yippie skips our highest end GPU is going to sell for what they did back in Voodoo 1 days and all of our expenses are only twice as much!".

Do people honestly believe that ATi shrinking their die made it possible for them to make the same profit selling $300 cards as they made previously selling $500 cards? Why? There have been die shrinks before, this is the "magic" one that makes huge margins possible when every other expense they have is much higher than it was?

My dad told me early on "There's no such thing as a free lunch" and when you take the profits out of a business the innovation and investment into it don't remain constant. Companies invest money where the profit is, and people who believe AMD likes selling 4870s for what they sold Radeon 1 VIVOs for are in for an awakening.

We should all be wishing both NVIDIA and AMD were making 100s of millions, because the current trend is a race to the bottom like so many other markets in our economy.
You guys must be blind? I'm not talking profits. I'm talking revenue's, see my very first post. You guys REALLY only seem to read what you WANT to read.

I understand why profits are down, it's not so weird when you have a huge diesize with a 40-50% failure rate etc etc. But I don't care, nvidia will be fine, and the drop in profits might also come from those 100's of miliions they set aside for the laptop chipsets overheating. I was talking revenue's, those that also went down, whilst they should have gone up if you look at the total sales made in the GPU market.

Also, you are SO SO wrong in your analysis, AMD had to start selling the 2900xt at greatly reduced prices because it sucked, and could only compete with the 8800gts 640mb. Then they came with the HD3870 which had to take on the 8800gt, what happened to the pricing? Yes it went down... Now with the prices of the 8800gt allready down a lot, ATI came with the HD4850, and HAD to price it agressively, because it's not THAT much faster then a 8800gt. Starting price of $199 doesn't even sound to ridiculous to me if you look at it like that.

All in all, margins might have gone down for both company's, but I bet margins are down more for nvidia, coz all the die shrinks and the lower transistor counts did put ATI ahead in terms of margins ...

Last but not least Nrollo, you're the spindoctor nobody argues with, I'm the nvidia videocard owning gamer, why would I be wanting to point at nvidia and laugh? I guess I'll follow suit of most other posters here, and ignore you ...
 

BenSkywalker

Diamond Member
Oct 9, 1999
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I don't see why Nvidia's stock should be down, just because the other stocks are down as well, when in comparison, the GPU market, in terms of sales, is thriving.
Alright, we can start getting a bit deeper now, first off, total OpEx for the quarter-

Operating expenses in the quarter were $311 million, which includes $8.3 million of restructuring costs.
So nV's entire operating expenses for the quarter were $311 million, think of everything that entails. Now, the potential downside to having very large amounts of liquidity in a volatile market-

On the balance sheet, cash and equivalents and marketable securities were $1.3 billion, which is down by $352 million from the second quarter.
Their losses in holdings accounted for some $41 million dollars more then all of their operating expenses. It isn't like nV has a record of keeping their assets in particularly risky ventures, although they do tend to handle it a bit better then the market norms. In spite of taking a $352 million dollar hit due to investments they still made a profit.

I understand why profits are down, it's not so weird when you have a huge diesize with a 40-50% failure rate etc etc.
Their margins on the desktop side haven't been hurt that much, the reduction in ASP on the notebook side is likely a larger factor. In all seriousness, bad yields don't hurt costs nearly as much as people like to think- as long as you can still produce enough to fill your orders. Yes, it certainly adds expense- just most people seriously overestimate the actual impact on pricing it has.

All in all, margins might have gone down for both company's, but I bet margins are down more for nvidia, coz all the die shrinks and the lower transistor counts did put ATI ahead in terms of margins ..
It depends, how much cheaper was nV getting their parts fabbed for by using an older build process? How does that offset the potential increased yields swapping to 55nm? Making the swap to a finer build process is going to make sense for any company at some point, but the lower thermals/power useage/increased clock rates are likely a larger reason for nV to undertake a die shrink then the amount of money they will save on yields.
 

Janooo

Golden Member
Aug 22, 2005
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Originally posted by: nRollo
...
I also think discussing "less profits for NVIDIA" in a year where their main competitor decided slash the price of their high end product to 1999 levels in an effort to win back some marketshare is fairly pointless. Profits are down largely because margins are.
...
The question is why the margins were so high last year?
We all know the answer. :)
 

apoppin

Lifer
Mar 9, 2000
34,890
1
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alienbabeltech.com
Originally posted by: nRollo
Originally posted by: rjc


"We have 65nm inventory remaining, but everything we are ramping now is 55nm; and everything on the high-end that we are shipping now is 55nm."

"And finally, this quarter we will announce a groundbreaking product that is starting to create buzz throughout the industry. Stereoscopic 3-D glasses for GeForce."
This is impossible- Charlie at The Inquirer said the GT200B is delayed for another respin till next year. Jen Hsun must have been mistaken and not read his article.

;)

Note: This should not be construed as me saying I know anything about GT200B, I just find it interesting NVIDIAs CEO says they're shipping all high end parts at 55nm, and Charlie says all 55nm parts are on hold.

Who to believe, who to believe? Arrgghhh...brain hurting...Charlie...FUD....conference call.......conflicting info....

<head explodes>

:D
agreed

now worries .. you have been "construed"
:Q




:D








Quick - name a multi-billion dollar HW industry whose profits are up


 

Phynaz

Lifer
Mar 13, 2006
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I also think discussing "less profits for NVIDIA" in a year where their main competitor decided slash the price of their high end product to 1999 levels in an effort to win back some marketshare is fairly pointless. Profits are down largely because margins are.
In other words Nvidia products are poor enough that Nvidia doesn't have pricing power. AMD has determined what Nvidia products sell for.

Not the best position to be in.
 

nRollo

Banned
Jan 11, 2002
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Originally posted by: Phynaz
I also think discussing "less profits for NVIDIA" in a year where their main competitor decided slash the price of their high end product to 1999 levels in an effort to win back some marketshare is fairly pointless. Profits are down largely because margins are.
In other words Nvidia products are poor enough that Nvidia doesn't have pricing power. AMD has determined what Nvidia products sell for.

Not the best position to be in.
Hmmm. Or is it that NVIDIA products were good enough that AMD had to price their second place GPUs far below NVIDIA's first place GPUs to try and get some sales based on price, not performance?

The fact they have the leading single card now and price it $100 above the leading single GPU shows us they're not pricing the way they do to be nice. ;)
 

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