Nvidia has published its latest financial results, and despite taking a serious hit on the recall of faulty Shield Tablet devices the company has beaten expectations with a five per cent boost in revenue year-on-year - a fact which has failed to rescue the company from an 80 per cent drop in net income.
In the company's latest financial announcement
, for the second quarter of its 2016 financial year, the company boasted of $1.153 billion in revenue, up five per cent on the same period last year. While it comes with a slight drop in gross margin, from 56.1 per cent last year to 55 per cent this year, the bigger news was an 80 per cent drop in net income from $128 million to $26 million - thanks in part to the recall of Shield Tablet devices
due to a fault which puts users at risk of fire.
A bigger impact on the bottom line came from the company's decision to wind down its Briston-based Icera mobile modem business unit, which it announced back in May
a mere four years after buying the 500-strong company for $367 million. While the company had looked to sell off the business unit, it claims no 'viable buyer
' could be found and so its closure comes as an entire loss.
'Our strong performance in a challenging environment reflects Nvidia's success in creating specialised visual computing platforms targeted at important growth markets,
' boasted Jen-Hsun Huang, president and chief executive officer, of Nvidia's results. 'Our gaming platforms continue to be fuelled by growth in multiple vectors - new technologies like 4K and VR, blockbuster games with amazing production values, and increasing worldwide fan engagement in e-sports. We're working with more than 50 companies that are exploring Nvidia Drive to enable self-driving cars, and our GPU-accelerated data centre platform continues to make great strides in some of today's most important computing initiatives - cloud-based virtualisation and high performance computing applications like deep learning.
Nvidia is predicting further growth to $1.18 billion for the next quarter, with a return to a profit margin on 56.2 to 56.5 per cent, but warns that a further $15 million to $25 million restructuring charge will again have an impact on the company's bottom line as it enters the second half of its financial year.