NVIDIA CEO Jen-Hsun Huang said "Our Q2 financial performance was disappointing," after announcing NVIDIA's first quarterly loss for six years.
Revenue was $892.7 million compared to $935.3 million for the same quarter last year, down five percent. That, combined with $196 million set aside to deal with problems associated with the weak die/packaging crisis, led to a net loss of $120.9 million.
The main reasons given for the lower revenue were basically a combination of AMD/ATI getting its act together and weak overall demand. NVIDIA conceded that its pricing prior to the launch of AMD's HD 4800 series was wrong and that it cost a fair bit to correct it to competitive levels. It also conceded that it took a while to clear 65nm inventory.
Accordingly all the underperformance was blamed on the desktop GPU division, which saw year-on-year revenues down 25 percent, unit sales down 20 percent and ASPs down 25 percent. Of course, the $196 million write off is apparently limited to the notebook division so there's blame to be attributed everywhere.
"The desktop PC market around the world weakened during the quarter. And our miscalculation of competitive price position further pressured our desktop GPU business," said Huang. "In contrast, the rest of our businesses did not exhibit the same dynamics as our desktop business. The notebook GPU, MCP, and Professional Solutions groups grew a combined 27 percent year-over year."