Nvidia braces its shareholders for a loss
If you do the math using figures provided by Nvidia on Tuesday, the outlook for the GPU manufacturer's fiscal fourth quarter looks very much like the thermometer here in the midwest US this morning: negative territory.
In a warning to investors, Nvidia said it expects its total revenue for fiscal Q4 to be 40 - 50% lower than the previous quarter, "as a result of further weakness in end-user demand and inventory reductions by Nvidia's channel partners in the global PC supply chain." That's the situation for every company in this sector, so this isn't Nvidia's fault; but it also shows the company isn't immune.
Last month, Nvidia reported its Q3 revenue to be $897.6 million. Subtract costs, and that shows a 29% annual drop in earnings. Cost of revenue in the quarter ending last October was $529.8 million, showing a slight decline in costs over the previous year.
Assume costs for Q4 even out at about $600 million, which is pretty normal for the company. If we split the difference and say Q4 revenue falls by 45%, that'll leave about $493.7 million -- paving the way for about $100 million in quarterly loss.
If that happens, the year in total won't look too good: about $3.4 billion in revenue (down 16% over fiscal 2008), and gross profit declining as much as 52% over the prior year.