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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 email@example.com
(END) Dow Jones Newswires
February 13, 2020 17:04 ET (22:04 GMT)
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