Friday, April 26, 2019

Nvidia tumbles on low revenue guidance

Nvidia CEO Jensen Huang speaks at a press conference on Jan. 7, 2018.

Nvidia stock fell by 6 percent on Thursday after the company reported better-than-expected earnings and lower-than-expected revenue guidance. The company will hold a conference call with analysts at 5:30 p.m. Eastern time.

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Here are the major numbers:

  • Earnings: $1.76 per share, excluding certain items, vs. $1.66 per share as expected by analysts, according to Thomson Reuters.
  • Revenue: $3.12 billion, vs. $3.10 billion as expected by analysts, according to Thomson Reuters.

Overall, Nvidia's revenue grew 40 percent year over year in the second quarter of its 2019 fiscal year, which ended on July 29, according to a statement.

With respect to guidance, Nvidia says it expects to post $3.25 billion in revenue, give or take 2 percent, in the fiscal third quarter; analysts were expecting $3.34 billion for that period, according to Thomson Reuters. The company expects that in the fiscal third quarter its gross margin will come in at 62.8 percent, give or take 50 basis points, excluding certain items, which is in line with the FactSet analyst consensus.

Most of Nvidia's revenue comes from its gaming business segment, whose revenue came out to $1.81 billion, above the $1.75 billion consensus estimate among analysts polled by FactSet.

The second-largest segment, data center, exceeded the $744 million estimate, at $760 million in revenue. The professional visualization category produced $281 million in revenue, above the $257 million estimate.

Nvidia's operating expenditures of $818 million were about $8 million above what analysts had expected for the quarter.

In the fiscal second quarter Nvidia announced that its chips are part of the world's fastest supercomputer, the U.S. Department of Energy's Summit.

But after the quarter ended, Nvidia announced the next generation of its graphics cards, Turing. "We believe gaming demand is seeing some softness due to a product transition (Turing), which we anticipate will be launched at the end of August," RBC Capital Markets analyst Mitch Steves wrote in a note to clients. In the meantime, Intel has begun teasing its own graphics cards that are meant to challenge Nvidia's.

Nvidia stock is up almost 35 percent since the beginning of the year.

This is breaking news. Please check back for updates.


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