Just last month, chipmaker NVIDIA
Numbers, numbers, and more numbers
Starting with some hard numbers: Revenue in the fourth quarter came in at $953.2 million, in line with the $950 million projection it provided a few weeks ago. Adjusted net income came in at $158.1 million, or $0.26 per share.
For the full year, revenue added up to just under $4 billion, with net income of $734.4 million, or $1.19 per share. Gross margin expanded meaningfully throughout the year, from 45.1% to 51.9%.
NVIDIA's first quarter guidance was a little light, with revenue expected in the range of $900 million and $930 million, which is below the $944.6 million that the Street is looking for.
The strongest link
A lot of the upside that investors are banking on is baked into NVIDIA's Tegra lineup of mobile processors. The company had already warned that this quarter would see some softness within its consumer products business, or CPB, which includes the Tegra family, as it shifts from its Tegra 2 chip to its quad-core Tegra 3 powerhouse.
NVIDIA's core GPU business was mostly flat, partially held back by the Thai floods and resulting hard drive shortages. The GPU segment brought in $621.5 million in the quarter, a 3.6% YOY decline, while representing 65% of revenue. The professional solutions business told the same story, shrinking 3.6% to $221.9 million.
The CPB chalked up $109.8 million in sales, which also took a hit in game console royalties. NVIDIA and Sony jointly developed the graphics processor found in the PlayStation 3, and the drop in console royalties was related to seasonality as well as that pesky hard-drive shortage.
That $109.8 million represented a 43% sequential plunge for the division, but this was mostly expected as NVIDIA ramps up production of the Tegra 3. That's not as ominous as it sounds, since when you look at the bigger picture, the CPB grew 60% YOY in the fourth quarter, nearly tripling to $591.2 million for the entire year.
That means that the vast majority of the total revenue growth that NVIDIA saw in fiscal 2012 was attributed to CPB growth. Full-year overall sales rose by $454.6 million, of which $393.6 million was from CPB growth.
Have no fear; Tegra is here
The Tegra 3 has already started to garner its fair share of design wins and may even be about to cut in on Qualcomm's
The superhero chip is shipping this quarter, and NVIDIA will soon kick up the game further with chips that feature integrated 3G and 4G LTE capabilities. This move towards integration will help NVIDIA try to take on Qualcomm, as integration has always been one of Qualcomm's strengths.
There are a couple of hurdles on the horizon, however: CEO Jen-Hsun Huang said that the company's margins might be adversely affected, as chip manufacturer Taiwan Semiconductor Manufacturing
Samsung seems like it will always be in the frenemy zone. The South Korean giant is an NVIDIA chip customer, but Huang sees Sammy becoming more of a direct competitor in the chip space. Samsung has long fabricated Apple's
Interestingly, there has always been some speculation that Cupertino is interested in moving its chip manufacturing to TSMC in light of its ever-escalating global patent war, which would reduce Apple's reliance on Samsung as one of its largest component suppliers.
Keep your eye on the ball
Shares have now peeked their head above water into sweet green territory as of this writing, having recovered from this morning's drop. While the quarter saw a couple of speed bumps with the transition to Tegra 3 and the hard-drive shortage, this long-term mobile-driven growth story remains soundly intact.
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