Under SEC scrutiny, Nvidia reports record Q4 results

Despite what is roundly considered to have been a sluggish year for PC sales, graphics-chip designer Nvidia Corp. Thursday reported record quarterly and year-end financial results for its 2002 fiscal year. At the same time, Nvidia said the U.S. Securities and Exchange Commission (SEC) has begun an investigation into certain transactions conducted by the company during its 2000 and 2001 fiscal years.

Nvidia reported net income during its fiscal fourth quarter was US$73 million, or $0.41 per diluted share, on revenue of $499.9 million, a jump of 135 percent compared to net income of $31 million, or $0.19 per diluted share, on revenue of $218.2 million during the same period last year.

Net income for the year was $177 million, or $1.04 per diluted share, on revenue of nearly $1.4 billion, an increase of 77 percent over last year, when the company reported net income of $100 million, or $0.63 per diluted share, on revenue of $735.3 million.

"Fiscal Q4 was our fourteenth consecutive quarter of record revenue," said Jen-Hsun Huang, Nvidia's president and chief executive officer (CEO), during a conference call with analysts and investors. Looking ahead, the company's continued growth is dependent upon further developments in 3D graphics, Huang said, adding that there is plenty of room for future growth in the area.

Nvidia's strong financial results was tempered somewhat by the company's announcement of an ongoing SEC investigation into certain transactions carried out during the company's 2000 and 2001 fiscal years. The announcement comes amidst heightened concern in the U.S. over corporate accounting practices following the collapse of energy trader Enron Corp.

In the case of Nvidia, the SEC is looking at how the company recorded reserves during the fourth quarter of fiscal 2000 and the first quarter of fiscal 2001, the company said. In addition, the SEC is investigating the possibility that product costs amounting to $3.6 million should have been recorded by the company during the first quarter of fiscal 2001, but were instead recorded during the second and third quarters of that same year, it added. Nvidia's fiscal 2000 year ended January 30, 2000 and its fiscal 2001 year ended January 28, 2001.