Feeds

Nvidia sales and profits rise despite PC slump

Gamers, high-end notebooks, and supercomputers fill the gaps

Secure remote control for conventional and virtual desktops

Graphics and ARM chip maker Nvidia is sailing smartly through the shrinking PC market, boosting both sales and profits – and doing so despite its transitions to Tegra4 and Tegra4i processors for smartphones, tablets, and other devices.

In the first quarter of fiscal 2014 ended on April 28, Nvidia's overall sales rose by 3.2 per cent to $954.7m. Big Green was able pull $77.9m to the bottom line, up 16.7 per cent compared to the year-ago period – even while investing in a substantial bump-up in research and development costs – thanks to a shift to higher margin products in both the discrete graphics and Tesla GPU coprocessor lines.

The PC market was down approximately 10 per cent in the first quarter sequentially, but Nvidia's GPU revenues were only down 5.6 per cent, explained CEO Jen-Hsun Huang on a call with Wall Street analysts after the markets closed on Thursday. That sequential decrease in GPU revenues was driven by a drop in desktop inventories by channel partners ahead of Intel's launch of its "Haswell" family of Core processors, expected in early June.

Huang is not losing sleep about what Intel has up its sleeve with Haswell-chip graphics, and is similarly not impressed by the discrete GPUs that AMD is fielding. "We are expecting to gain share on Haswell and continue our leadership in GPUs," he said.

GPU sales were actually up 8.1 per cent to $785.6m in the quarter, and one of the reasons is that Nvidia does not participate in the low end of the PC market that is being disrupted by tablets.

High-end GeForce discrete graphics cards based on the "Kepler" series of GPUs are doing well as gamers upgrade their machines, and ditto for Kepler-based Quadro discrete cards aimed at workstations and the variants in the Tesla line that are aimed at servers and workstations to do computing instead of visualization. Quadro sales were flat sequentially from fiscal Q4, which set a new high, and Tesla GPU coprocessors had a 55 per cent jump in sales in fiscal Q1, and were flat sequentially – again, compared to a high set in the fourth quarter as some very large ceepie-geepies were installed at major supercomputing centers.

Nvidia pulled in by six months the launch of the Tegra4i ARM chip, which has integrated LTE communications married to a Cortex-A9, and has also launched the Tegra4, based on the Cortex-A15, and it was no surprise at all to Huang that sales of their Tegra3 predecessor were down. Tegra chip sales were $103.1m in the quarter, down 22.2 per cent compared to last year and half of the $204.8m in revenue the Tegra line had in fiscal Q4.

"This market is doubling every year," Huang said of the chips used in smartphones, autos, and other devices where the Tegra4i is targeted, "and the sooner we engage, the better off we will be."

Huang said that companies would line up for Tegra 4 chips for tablets, smartphones, set top boxes, car systems, and its own Shield game console this quarter, "ramping quite hard" in Nvidia's third quarter. Nvidia expects to get the Tegra 4i into production late in the third quarter or early in the fourth quarter, with the chip appearing in products in the first quarter of next fiscal year.

Nvidia also booked $66m in licensing revenue from Intel in the quarter. The company had $3.71bn in cash and equivalents in the bank, and has said that it will return $1bn to shareholders through stock repurchases and dividends this year. That leaves quite a big pile of dough left over, even after building a new headquarters, as Nvidia is doing.

Looking ahead, Nvidia told Wall Street to expect revenues of between $955.5m and $994.5m, and at the midpoint of $975m, that will be a 6.6 per cent revenue decline compared to the second quarter of fiscal 2013 ended in July. This is the effect of ramping up Tegra 4 and Tegra 4i and the delays ahead of Intel's Haswell launch. Nvidia no doubt hopes to make up lost ground – and then some – in the second half of its fiscal year. ®

Boost IT visibility and business value

More from The Register

next story
Assange™: Hey world, I'M STILL HERE, ignore that Snowden guy
Press conference: ME ME ME ME ME ME ME (cont'd pg 94)
Premier League wants to PURGE ALL FOOTIE GIFs from social media
Not paying Murdoch? You're gonna get a right LEGALLING - thanks to automated software
Online tat bazaar eBay coughs to YET ANOTHER outage
Web-based flea market struck dumb by size and scale of fail
Amazon takes swipe at PayPal, Square with card reader for mobes
Etailer plans to undercut rivals with low transaction fee offer
Caught red-handed: UK cops, PCSOs, specials behaving badly… on social media
No Mr Fuzz, don't ask a crime victim to be your pal on Facebook
US regulators OK sale of IBM's x86 server biz to Lenovo
Now all that remains is for gov't offices to ban the boxes
XBOX One will learn to play media from USB and DLNA sources
Hang on? Aren't those file formats you hardly ever see outside torrents?
Class war! Wikipedia's workers revolt again
Bourgeois paper-shufflers have 'suspended democracy', sniff unpaid proles
prev story

Whitepapers

Endpoint data privacy in the cloud is easier than you think
Innovations in encryption and storage resolve issues of data privacy and key requirements for companies to look for in a solution.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Top 8 considerations to enable and simplify mobility
In this whitepaper learn how to successfully add mobile capabilities simply and cost effectively.
Solving today's distributed Big Data backup challenges
Enable IT efficiency and allow a firm to access and reuse corporate information for competitive advantage, ultimately changing business outcomes.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.