Nvidia Earnings Recover on Surging Gaming, Data Center Demand
February 13 2020 - 5:19PM
Dow Jones News
By Asa Fitch
Graphics chip-making giant Nvidia Corp. reported recovering
earnings, buttressed by strong gaming revenues and record sales to
big data centers that are using its hardware in artificial
intelligence calculations.
The Santa Clara, Calif.-based company on Thursday said fiscal
fourth-quarter sales rose 41% to $3.11 billion. Adjusted earnings
per share more than doubled to $1.89, ending a streak of four
quarters of weaker year-over-year results.
The results bested Wall Street forecasts. Analysts expected
Nvidia to generate sales of $2.96 billion and $1.67 in adjusted
earnings per share, according to a FactSet survey.
Nvidia's shares rose more than 5% in after-hours trading.
Nvidia gave a positive outlook for the current quarter, which
ends in April. Revenues are expected at $3 billion, above what
analysts had forecast.
The outbreak of the coronavirus in China, the company said, was
difficult to estimate. It resulted in a $100 million reduction to
expected sales in the current quarter, the company said. Nvidia
generated around 24% of sales last fiscal year in China, according
to regulatory filings.
Nvidia has recently benefited from growing interest in
artificial intelligence, another computational challenge where its
graphics processors excel. Big cloud-computing players like
Amazon.com Inc. and Alphabet Inc.'s Google unit use Nvidia chips to
satisfy their customers' demand for more AI computing power.
Nvidia has also long been a leading player in gaming, which
remains its largest revenue source. Nvidia chips are used in
Nintendo Co.'s Switch gaming consoles. Nintendo said it had sold
10.81 million Switch devices in the final three months of last
year.
The last quarter's earnings jump partly reflected poor
performance in Nvidia's year-earlier period, when the company was
grappling with a slump in cryptocurrency markets. Nvidia's graphics
processors are well-suited to solving the complex mathematical
calculations that go into cryptocurrency mining, driving demand for
the chips while the market remained hot in 2018 but causing a lull
when it softened thereafter.
Write to Asa Fitch at asa.fitch@wsj.com
(END) Dow Jones Newswires
February 13, 2020 17:04 ET (22:04 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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