Graphics and mobile chip kingpin Nvidia posted unexpectedly solid results for the second quarter of its fiscal 2016 on Thursday and said it projected next quarter’s numbers to be strong, as well. Nvidia is also forecasting revenue of $1.16 to $1.20 billion for Q3 2015, which is higher than the $1.10 billion that it had anticipated for the quarter.
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Nvidia provided sales guidance for the third quarter ahead of Street estimates, and its shares surged more than 9 percent in after-hours trade on the Nasdaq. For the quarter the chipmaker reported adjusted diluted earnings per share of $0.34 and $1.15 billion in revenues.
“Our strong performance in a challenging environment reflects Nvidia’s success in creating specialized visual computing platforms targeted at important growth markets”, said Jen-Hsun Huang, president and CEO at Nvidia. Similarly, earnings plummeted 77% to five cents a share from 22 cents a share in the prior year quarter.
Nvidia gets a majority of its revenue from its graphic chips made for personal computers.
On average, 25 analysts polled by Thomson Reuters expected earnings of $0.10 per share for the quarter. This should not be surprising for those who are familiar with the enthusiast PC gaming industry, as the 900 series GeForce graphics cards, NVIDIA’s latest, have largely been well-received (the GTX 970’s RAM controversy notwithstanding), as has its uber high-end GTX Titan. Nvidia GRID, for example, has more than tripled its user base over the a year ago. Gross margins are forecast at 56.5% on a non-GAAP basis, plus or minus 50 basis points. NVIDIA’s total revenue rose 4.5% to $1.15 billion in Q2 2015, where analysts had expected $1.01 billion in sales.
In May, Nvidia said it would wind down its Icera modem operations after efforts to find a buyer proved futile. NVIDIA- branded products and services are visual computing platforms that address four markets: Enterprise, Gaming, High Performance Computing & Cloud, and Automotive.
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That seemed to suit investors just fine, and they boosted the company’s share price by almost 9 per cent in extended trading on the news. Stockholders of record on Thursday, August 20th will be issued a $0.0975 dividend.
