Sunnyvale-based GPU titan Nvidia reported earnings on Wednesday and neither they nor the market were happy with the results and where the business is going in 2012. Nvidia (NASDAQ:NVDA) posted earnings of $0.16 per share on net income of $116.0 million in the 4th quarter of 2011 versus $0.23 per share and net revenues of $139.0 million in 2010.
Sales growth was strong but costs rose. Top line revenue was up 7.5% to $953 million over 2010. They guided that gross margins would be 49.5% in the first quarter of 2012.
CEO Jen-Hsun Huang was predictably pleased with the outcome, saying: “We expect continued growth ahead, as Tegra 3 powers a new wave of quad-core super phones and Kepler, our next-generation GPU architecture, sets new standards in visual and parallel computing.” We’re expecting plenty of great devices too — the Transformer Prime TF700T in particular.
Their business has moved away from being primarily a GPU maker with their integrated processors, the ARM-based Tegra and Tegra 2 which power many Android-based tablet computers. But Apple’s (NASDAQ: AAPL) iPad dominates the market using Apple’s own processors.
With the launching of Microsoft’s (NASDAQ:MSFT) Windows 8 later in the year the opportunity will be there for ARM-based processors to make headway as the new version of the dominant desktop OS will support them in addition to the latest CPU’s from Intel and AMD’s Phenoms. Of course, tablets running Windows 8 is a shot in the dark at this point given the lead that both Android and iOS have in the portable computing space.
Shares of Nvidia fell as much as 6% in after-hours trading.
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