http://phx.corporate-ir.net/phoenix....8481&highlight=
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CC notes:
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Analysts average expectations are around $82-83M profit. Highest one is $90M. Personally, I'm expecting $100-115M, considering NVIDIA's current "high operating costs, high gross margins" situation and the fact this is a high-revenue quarter.
Anyhow, this post will be updated whent he press release is out, and afterwards with the my notes of the conference call.
Uttar
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CC notes:
- 7th consecutive year of profitability
- Had launched GF6 at year begin. Wanted to increase the reach of SLI & improve gross margins.
- Create a "platform of consecutive growth"
- Core business grew 26% year over year. More than offsets XBox decline.
- Mobile etc. grew 18%, higher than the PC industry average
- Strengthening position with [insert 7xxx chips]
- Important notebook products advantage (perf/watt etc.). Now noticing real growth coming from there.
- Surpassed $100M revenue in core logic. Strategy: create the number 1 brand covering every segment.
- 40% year over year workstation growth.
- New handheld stuff shipping in Motorola [X] and Sony Ericson [Y], won an award.
- 3M SLI motherboards and 9M SLI GPUs shipped.
- RSX is ready.
- Bought ULI. Part of their platform solutions strategic
- And improves their sales/marketing presence in Taiwan.
- Improved gross margins furthermore.
-
- Desktop segment share increased to 51% according to Mercury
- Started nForce4 SLI XE/etc. ready, first mainstream stuff they
- Record revenue for the last 6 quarters there.
- Introduced 3 new notebook GPUs.
- Creating tools to enhance HD video creation (?)
- GoForce 5500 handheld GPU, first with DVD-quality video, 10MPix, surround sound, etc.
- Expected for Holidays 2006 avaibility.
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- P&L: revenue up 8.6% from Q3, 12% from last Q4.
- MCP sales increased by 83% in the year, offsetting XBox alone.
- Bunch of gross margins improvement notes
- Operating expenses relatively flat with Q3, considering Q3
- Got the benefit of holdiays in Q4, so "we ARE continuing to hire".
- Taxrate was 16% for the quarter and for the year.
- Repurchased $50M of own stock.
- Balance sheet: Cash jumped to $950M.
- Reduced accounts receivable by $40M and inventory by $30M.
- Good recollection
- Inventory reduction because of the significant reduction in older products.
- Slightly offset by new products.
- Accounts payable was flat quarter to quarter.
- Outlook: "we believe seasonal weakness will be more than offset by growth, notebook, etc. etc."
- We do not anticipate
- We expect to increase revenue by about $10M through ULI.
- Revenue to increase 3-6% in the quarter.
- Contin
- No soy royalties in Q1, but expect +50 to 100
- Operating expenses will increase in Q1 (ULI/No holiday benefits/headcount
-
- Stock option expenses will be included; about $20M. Taxrate could be lower thanks to that, though.
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- "We are well position to have another strong year"
- Share gains, MS Vista, HD-DVD and Bluray => growth.
- Will continue rolling out GF7 chips in the next few months.
- Will expand technology leadership position.
- Increased "GPU adoption" expected (??)
- Growth in notebooks: best perf & best perf/watt for GF7
- Expected notebook marketshare to DOUBLE by the end of the year.
- Growth in MCP will be driven by growth in all segments, including Intel mainstream MCP & AMD
- RSX production notes.
- 3G: GoForce 5500 is the first to allow DVD-quality video etc., we expect great things.
- Important: providers ramping up, expect to be in good position to benefit from surging demand.
- 5500 will serve 3G but other segments too => good to expand in handheld in general.
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- Morgan Stanley
- Other Income decreased because of charges with Jobs Creation Act stuff.
- But small.
- RSX royalties: being "rather cautious about what we say about PS3 because it's not our product, it's Sony's product"
- We are completed with our designwork, we have production silicon in hand, so now it's up to Sony.
- Notebook is 5% right now.
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- GF7: 20% in Desktop. Higher in notebook. (for Q4)
- "amount of revenue in Q4 from Sony is in the area of $20M"
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- MCP: "Only company in the world serving every segment of the AMD market".
- First quarter we entered IGP again. "very low cost to stay price competitive".
- "number of AMD CPUs shipping in the market next year is pretty significant"
- "my expectation is we should capture it". "integrated business is pretty sizeable"
- "highest growing business [for us] in absolute amounts"
- From a strategic perspective, more and more of the capabilities of the PC will involve the corelogic.
- "Products like SLI wouldn't have been possible".
- so core logic expertise is helping
- Target of 45%: "you need to grow your topline, grow your bottomline, grow your influence."
- Different company factors will contribute to different things.
- Core logic will contribute topline
- Margins are lower but not so low it's going to draw overall margins down noticeably.
- Whole company is working towards it [with its division's limitations]
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- WMP (including 3G) business is in the $25M range right now.
- "my expectation is it will be much larger next year"
- Gonna grow because of increasing interest in GPU and offering expansion.
- Going to go against 2.5G too for their first time.
- "Cellphones tend to be a bumpy business".
- Visibility comes from design wins, so it's good internally.
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- "Architectural efficiency is everything" (in notebooks)
- Seeing adoption of it as result.
- HD-DVD/Bluray is going to help for GPU adoption in notebooks too.
- Design win momentums are very strong. So "going to do quite well this year".
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- Refused to give % publicly for discrete/notebook/etc. (asked for a private call)
- We took the crown with GF6, then introduced GF7.
- "The buzz around the industry is we have something to announce soon"
- "My expectation is that it's really about technology leadership and ability to produce the product".
- "Majority of game enthusiasts in the world have SLI".
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- Our perf/watt is around 60% higher for our high-end GPUs.
- It's a "dramatic difference" compared to the competition.
- Related to diesize; ours is lower. Lower leakage, too.
- "my sense is that design wins will reflect [that superiority] very quickly"
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- ASP was relatively flat to slightly up in desktop GPUs.
- Highest margin increase is in the MCP area.
- GPU business margins are flat but above corporate average.
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- Near-term, what about how to manage the margin goals in Q1?
=> gross margin improvements don't come from a single thing.
=> New Q1 products have very good gross margins, will benefit from that.
- Gaming market more and more oriented towards MMO and online.
- Game consoles are aiming fo a different market.
- "Very excited about more teenagers just putting more time in front of PCs"
- So it's a totally different platform than consoles, not competing.
- Vista: very important. Not only for notebooks. "it's so different".
- "it's gonna change PCs, you know, all the way through"
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- "we've had a billion dollars in cash before"
- "will continue to acquire, hopefully for cash"
- "still have a stock buyback program in place"
- "beyond that, we don't have any huge plans for what to do with that cash"
- "I'm not really a market analyst, [...], but I can tell you Vista uses a lot more GPU power".
- "and we'll see what happens" - "my sense is that 10% on a very large market is significant"
- "[...] bubbles [...] don't last a quarter" => Vista to have some medium-lasting impact, not just 1-2 quarters.
- "As a guessing person, I would say 'absolutely'". Tons of Vista gadgets will 'attach to GPUs.
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- Setting aside the royalties, license fees and NRAs (profitability, not revenue), that's in the $70-75M for THIS year.
- So $70M is definitively not out of the question.
- "There won't be CPU shortages forever [in the AMD market]"
- => ...
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- "we were relatively constrained this quarter in high-end revenue"
- "my hope is that the constraint is going to go away shortly"
- "managing our transition cautiosly is what's happening there"
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- PS3/Quadro/GPU in general growth => very high margin growth
- "We are going to capture share [in the discrete GPU segment]"
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- "I guess our schedules are, err, really determined by, err, our schedules"
- "Our competition has a new GPU, but we're not intimidated by it, we have some very exciting stuff rolling out"
- Expecting it keep the performance leadership position.
- "we are driving a new architecture from top to bottom"
- Performance & Price & Brand are important.
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Analysts average expectations are around $82-83M profit. Highest one is $90M. Personally, I'm expecting $100-115M, considering NVIDIA's current "high operating costs, high gross margins" situation and the fact this is a high-revenue quarter.
Anyhow, this post will be updated whent he press release is out, and afterwards with the my notes of the conference call.
Uttar
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