Net income slumped almost 80 percent to $26 million in the quarter due to higher costs and a bigger tax bill.
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CEO Jen-Hsun Huang remarked that the company demonstrated “strong performance in a challenging environment”, a reflection of “NVIDIA’s success in creating specialized visual computing platforms targeted at important growth markets”.
Results for the quarter included, among other things, a charge of $0.19 per share related to the wind down of Nvidia’s Icera modem operations. Analysts’ estimates typically exclude special items.
Nvidia’s automotive business looks like it has great potential, as it was announced to investors that “more than 50 companies that are exploring Nvidia DRIVE PX to enable self-driving cars”.
But, Nvidia said gaming revenue rose 59 percent, helped by strong sales of its popular GeForce series of gaming chips.
The company chief also exhibited excitement for enterprise graphics and cloud initiatives as Nvidia’s business customer base has more than tripled in one year to over 300 enterprises.
Nvidia said its earnings were partly hurt by gross margin that slid to 55 percent from 56.1 percent last year, and operating expenses climbed to $558 million from $456 million. At the time, Nvidia said it was “open to a sale of the technology or operations”, but said Thursday that “a viable buyer failed to emerge”.
Revenue rose 4.5 percent to $1.15 billion compared with the average analyst estimate of $1.01 billion.
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The firm’s revenue rose to $1.15 billion within the second quarter ended July 26 from $1.10 billion a yr earlier. Macquarie raised shares of NVIDIA from a “neutral” rating to an “outperform” rating and increased their price objective for the stock from $22.00 to $24.00 in a research report on Monday. Analysts now expect revenues of $1.10 billion for the quarter. Up to Thursday’s close, they had risen almost 2 percent this year, compared with a near 12 percent fall in the broader Dow Jones US chip index. NVIDIA has a 12-month low of $16.77 and a 12-month high of $23.61.
