Arik Hesseldahl

Recent Posts by Arik Hesseldahl

Nvidia's Strong Results Include a Little Something From Intel

Graphics chipmaker Nvidia just reported its quarterly results and they look pretty strong. Shares are rising by nearly 3 percent after hours as the company reported a $135 million profit on sales of $962 million, which works out to 27 cents a share. Analysts had called for 19 cents a share. Gross margins increased to 50.4 percent, up from 45.6 percent in the year-ago quarter.

One bit of news that caught my eye in particular was in the commentary from CFO Karen Burns:

Our patent cross-license agreement with Intel also contributed to the strength in our GPU business, with one month’s worth of revenue recognized in the first quarter.

Remember if you will that Nvidia and Intel, as I first reported right here, settled a nasty patent litigation in January. The deal calls for Intel to shell out $1.5 billion to Nvidia, and the first payment came in this quarter. How much was it? Exactly $22 million, but as Burns’ comments indicate, it amounted to only one month’s payment, not one quarter’s worth.

Going forward, Nvidia can expect to bring in $66 million a quarter from Intel or $264 million a year. Not huge, but still not bad for a company that did $3.5 billion in sales last year and is on a run rate to do $4 billion this year.

The company also said it expects revenue growth of 4-6 percent compared to Q1, which would suggest sales of $1 billion and change, ahead of the current consensus estimate of $992 million.

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I think the NSA has a job to do and we need the NSA. But as (physicist) Robert Oppenheimer said, “When you see something that is technically sweet, you go ahead and do it and argue about what to do about it only after you’ve had your technical success. That is the way it was with the atomic bomb.”

— Phil Zimmerman, PGP inventor and Silent Circle co-founder, in an interview with Om Malik