Nvidia's 2001 Results Exceed Expectations

Microsoft accounted for 17 percent of Nvidia's fourth-quarter sales, compared with 15 percent in the prior quarter. NVidia beat most analysts' expectations, recording net income of $193.0 million ($1.13 a share) for the full year, up from $99.9 million (63 cents per share) a year earlier. Sales nearly doubled to $1.37 billion from $735.3 million. Unfortunately the good news was somewhat tempered by the company's disclosure that it was launching an internal investigation of its accounting practices, following an SEC inquiry. The internal investigation revolves around the recording of certain reserves and the timing of certain expenses in Q4 2000 and first three quarters of fiscal 2001. The company said it is investigating whether certain expenses recorded in Q2 and Q3 of last year, totaling up to $3.6 million, should have have been recorded in Q1 2001. The internal review is also related to the SEC's previously announced investigation of alleged insider trading by some NVidia engineers. The internal accounting probe, though shrugged off by most Wall Street analysts, nevertheless took down the company's stock in after-hours trading by about $4, to $57. Nvidia raised guidance for fiscal 2003, expecting revenues of $2.3 billion to $2.5 billion and earnings per share of $1.70 to $1.75.