Nvidia (NVDA - commentary - Cramer's Take) reported first-quarter results after the close on Thursday that were in line on the top line but missed pro forma EPS expectations. More importantly, July quarter guidance is definitely a disappointment.
Revenue in the quarter was $1.15 billion (up 37% year over year but down 4% quarter over quarter), with pro forma EPS of 36 cents (GAAP = 30 cents). The pro forma gross margin in the period was 44.9%, a decrease of 50 basis points year over year and down 100 basis points quarter over quarter due to yield issues ramping a new product. The pro forma operating margin was 21.3%, essentially flat with last year but down 370 basis points from the prior quarter.
Cash from operations was not disclosed on the call, and no cash flow statement was included. The cash account declined about $180 million, to $1.6 billion, after several small acquisitions, a land purchase and stock repurchase. Accounts receivable was essentially flat from the prior quarter, but days sales outstanding increased one day (51 days). Inventory also increased about $60 million, with days of inventory at 59 days, down six days from the year-ago period but up 10 days from fourth quarter. Inventory in the channel was characterized as being up slightly.
From the perspective of the company's reporting segments, management didn't provide specific revenue data, only growth rates. The graphic processing unit was up 45% from last year but down 8% sequentially. Units increased 42% from last year and the ASP was up 10%. The professional solutions business was up 44% from last year's level and 21% sequentially. The media and communications processor segment was up 317% year over year and down 4% quarter over quarter. Lastly, the consumer products business decreased 37% year over year and 21% quarter over quarter. Overall, management believes it gained 3% points of market share from last year.
Semiconductors NVDA Preview: Expectations Are Low 5/7/2008 4:53 PM EDT Current consensus is for revenue of $1.15 billion and EPS of 38 cents.
Semiconductors A Graphic Look at Nvidia's Prospects 5/1/2008 11:59 AM EDT The graphics-chip maker struggles to break out, and the outlook is cloudy.
Semiconductors Don't Panic on Rising Chip Inventories 4/28/2008 1:49 PM EDT Demand is slow, but the bump in semiconductor inventory is not as dire as it looks.
At the time of publication, Faulkner had no positions in the stocks mentioned.Bob Faulkner has been in the investment business for 18 years with an exclusive focus on technology stocks. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Faulkner appreciates your feedback; click here to send him an email.Interested in more writings by Bob Faulkner? Check out his newsletter, TheStreet.com The Telecom Connection. For more information, click here.
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