Now we know why Nvidia issued that profit warning last month. Not only was its revenue lower than expected for its second fiscal quarter, but the company also posted a sizable net loss. Here's the extent of the damage:
|Q2 FY'10||Q1 FY'11||Q2 FY'11|
|Revenue||$776.5 million||$1,001.8 million||$811.2 million|
|Net income||-$105.3 million||$137.6 million||-$141 million|
Again, Nvidia blames both "economic weakness" in Europe and China and the popularity of integrated graphics for the poor results. The firm claims the economic weakness led to an inventory write-down. Today's announcement brings up one other factor, though: a $193.9-million write-off related to those chip packaging issues from a couple of years back. Nvidia says the charge covers "additional remediation costs, as well as the estimated costs of a pending settlement of a class action lawsuit."
Now for the good news. The company expects its gross margin to climb back to a healthier 46.5-47.5% this quarter, and it foresees a 3-5% increase in revenue. GAAP operating expenses should also add up to around $300 million, down from a whopping $618.4 million last quarter.