by Scott M. Fulton, III February 11, 2009
In one of the most dramatic representations yet of the downturn in the global economy, GPU maker Nvidia's entire fiscal 2009 dove deep into the red ink, turning a banner year into a red flag in just one quarter. If it hadn't have been for the economy, Nvidia's year would actually have turned out okay. But a $147.6 million loss for just the quarter ending last January -- its fiscal Q4 2009 -- dipped the entire year into the red to the tune of $30. "Our sell-in was less than the channels sell-out," reported Nvidia CFO Marvin Burkett yesterday (our thanks to Seeking Alpha for the transcript). "We believe current channel inventory is only slightly more than one month, down from almost three months last quarter. ASPs [average selling prices] across the board were relatively unchanged from the prior quarter, so the decline in revenue was primarily a reflection of the decline in unit volume." In other words, builders aren't buying, in a very big way, and it's builders who constitute the bulk of Nvidia's customers. As a result, fiscal 2009's total year profit is down 37% over fiscal 2008, due in major part to the last quarter reaping 60% less revenue over the previous year's Q4, and gross profit (before expenses) that's down annually almost three-fourths. The cause: Somehow, you knew Nvidia would find a way to blame Intel. This time, it's the rise of the netbook -- a PC form factor that doesn't need, or have room for, discrete graphics chips.
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