Nvidia revenue forecast beats estimates; shares rise
Written by MagaFirstNews on May 16, 2019
FILE PHOTO: The logo of Nvidia Corporation is seen during the annual Computex computer exhibition in Taipei, Taiwan May 30, 2017. REUTERS/Tyrone Siu/File Photo
May 16, 2019
(Reuters) – Nvidia Corp reported a better-than-expected quarterly profit and forecast second-quarter revenue above analysts’ estimates, boosted by higher demand for its gaming chips, sending its shares up 6% in extended trading.
Nvidia has entered into newer growth areas such as data centers, artificial intelligence and self-driving cars as it looks beyond its bread-and-butter business of selling chips that enhance video game graphics.
The company has grown at a rapid pace in the past few years, but a slowdown in China and trade tensions were expected to weigh on its operations.
“Despite the near-term pause in demand from hyperscale customers, the application of AI continues to accelerate,” said Chief Executive Officer Jensen Huang.
The company forecast revenue of $2.55 billion, plus or minus 2%, for the quarter, above analysts’ expectations of $2.53 billion, according to IBES data from Refinitiv.
The positive forecast allayed investor concerns about sluggish data center demand, which was flagged by bigger rival Intel Corp.
Nvidia’s net income fell to $394 million, or 64 cents per share, in the first quarter ended April 28 from $1.24 billion, or $1.98 per share, a year earlier.
Excluding items, Nvidia earned 88 cents per share, while analysts had expected a profit of 81 cents per share. Total revenue fell to $2.22 billion, but was still above analysts’ estimates of $2.20 billion.
(Reporting by Sayanti Chakraborty in Bengaluru; Editing by Anil D’Silva)