nVidia Q2 financial results

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Meghan54

Meghan54

Lifer
Oct 18, 2009
11,684
5,228
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Lost over 50% of their stock value this year....$18.88 down to $8.96.

Sucks.
 
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tincart

Senior member
Apr 15, 2010
630
1
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Large inventory write-down. Ouch.

Tegra 2 sitting around in a warehouse somewhere?
 
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SlowSpyder

Lifer
Jan 12, 2005
17,305
1,002
126
Non-Charlie written Semiaccurate.com article for those interested.

http://www.semiaccurate.com/2010/08/12/nvidias-q2-financial-phone-thon/

Kind of funny that the article mentioned: During the call Nvidia revived rumors of working on an Exa-Scale, GPU-based supercomputer in conjunction with Oak Ridge National Laboratory and several "top universities".

This contradicts Charlie's own earlier story about that being cancelled.
 
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Madcatatlas

Madcatatlas

Golden Member
Feb 22, 2010
1,155
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What does an "inventory write down" mean? Please enlighten those of us who arent into this company buisness thing... :p
 
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v8envy

Platinum Member
Sep 7, 2002
2,720
0
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Unsold product sitting in a warehouse has a value assigned to it, which is reported on the "assets" part of your balance sheet. If that product value declines for some reason then the company needs to "write it down."

So, for example, if NV had 1 million G92 chips in a warehouse somewhere valued at $20/ea with nobody willing to buy any more at that price it would be reasonable to write down that inventory from a value of say $20,000,000 to $1,000,000. Totally fictitious example, but you get the point.
 
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tincart

Senior member
Apr 15, 2010
630
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nVidia has some product sitting around somewhere (the inventory) and it is recorded in their books at a certain value.

However, nVidia had to decrease the book value of that inventory in order to make it accurately reflect the value they could get from selling it by $70 million (according to Janney Capital analyst Nick Aberle). This is generally recorded as an expense at the end of the financial quarter.

So nV has some stock of something that they now expect to sell for $70 million less than they had planned previously.
 
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Idontcare

Elite Member
Oct 10, 1999
21,110
64
91
tincart said:
The inventory write-down is a separate charge from the $193 million for defective dies.
Click to expand...

$193m is a lot of money...I thought they had filed an insurance claim for right around this amount. Did the insurance claim fall through?
 
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ronnn

Diamond Member
May 22, 2003
3,918
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So nobody is making money in graphic cards. Not really a good sign for the future.
 
brybir

brybir

Senior member
Jun 18, 2009
241
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Madcatatlas said:
with 2,5 BILLION in the bank, i wouldnt worry at all if i was Jensen
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You are right in that they are not in any immediate need of capital to remain stable.

However, these were quarterly earnings. A company that has quarter after quarter of losses can only keep going for so long.

The other downside is that negative earnings dilutes their stock price and future outlook, which will make it more expensive for them to borrow in the debt markets. Generally they may have some cash stockpile but they are also going to have some debts in the bond market. So long run, they may be fine for cash, but negative earnings reports over and over and a bad outlook will certainly cost Nvidia in the longer run. It may not break Nvidia, but each dollar spent on higher costs in the debt markets is a dollar that could have went to shareholders, R & D or other expenses to make even more money.
 
brybir

brybir

Senior member
Jun 18, 2009
241
0
0
Idontcare said:
$193m is a lot of money...I thought they had filed an insurance claim for right around this amount. Did the insurance claim fall through?
Click to expand...

Here is what you are referring to I think:

http://www.tgdaily.com/business-and...-company-falls-out-over-faulty-chips-payments

Probably does not help that Nvidia's insurance company is a division of AIG...lol


You can see the docket for this case at the following link:
http://dockets.justia.com/docket/california/candce/4:2009cv02046/214794/

Currently, and recently (8/5/2010), the lawsuit by Nvidia's insurance company (NUFIC) against Nvidia was dismissed with predjudice meaning it cannot be refiled. It was dismissed because the parties reached some sort of confidential settlement agreement.

You will probably see the results of any insurance payouts in Q3 earnings from Nvidia. Judging by the scope of the lawsuit, the litigation would have costs millions and millions of dollars and involved a lot of major industry players.
 
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shangshang

Senior member
May 17, 2008
830
0
0
brybir said:
You are right in that they are not in any immediate need of capital to remain stable.

However, these were quarterly earnings. A company that has quarter after quarter of losses can only keep going for so long.

The other downside is that negative earnings dilutes their stock price and future outlook, which will make it more expensive for them to borrow in the debt markets. Generally they may have some cash stockpile but they are also going to have some debts in the bond market. So long run, they may be fine for cash, but negative earnings reports over and over and a bad outlook will certainly cost Nvidia in the longer run. It may not break Nvidia, but each dollar spent on higher costs in the debt markets is a dollar that could have went to shareholders, R & D or other expenses to make even more money.
Click to expand...

AMD has been operating with losses forever before (way before ATI came along).
 
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extra

Golden Member
Dec 18, 1999
1,947
7
81
shangshang said:
AMD has been operating with losses forever before (way before ATI came along).
Click to expand...

Yeah...lol...

AMD needs a new marketing team...badly. I'm pretty sure that if I was in charge of AMD's marketing division I could generate a TON more consumer sales without even trying very hard, and create some brand recognition and loyalty...and I'm not the brightest guy in the world...but somehow they seem completely incapable of doing even the most basic crap.

Anyway, lol--yes nvidia had a mediocre year--this does NOT mean doom and gloom for them. Fermi is a solid new architecture--tegra isn't as bad as everyone says (come on, those who have used a Zune HD will SURELY agree with me here)....
 
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tincart

Senior member
Apr 15, 2010
630
1
0
extra said:
Anyway, lol--yes nvidia had a mediocre year--this does NOT mean doom and gloom for them. Fermi is a solid new architecture--tegra isn't as bad as everyone says (come on, those who have used a Zune HD will SURELY agree with me here)....
Click to expand...

I would totally buy chips from you.

It doesn't matter whether Fermi is a solid architecture nor does it matter that Tegra isn't as bad as everyone says.

In the latter case, they need to actually sell Tegra and in the former they need to sell Fermi a reasonable margin.

Not to paint a doom-and-gloom scenario. nV will obviously survive this, but they are not going to be an interesting investment opportunity until 1h 2011 at least.
 
bryanW1995

bryanW1995

Lifer
May 22, 2007
11,144
32
91
they probably wrote down their gf100 chips, figured they would take the hit now and get it over with. next quarter should be much more positive for nvidia with gtx 460 sales ramping up strongly and fermi II getting much closer to reality.
 
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