Nvidia's 1Q Profit Expected to More Than Double Driven by Gaming, Data Center Demand Amid Pandemic -- Earnings Preview
May 21 2020 - 9:29AM
Dow Jones News
By Maria Armental
Graphics chip-making giant Nvidia Corp. is slated to report
first-quarter results on Thursday, offering an early view into the
impact of the coronavirus pandemic on its operations. Here's what
you need to know:
PROFIT: Analysts expect profit for the quarter ended April 26 to
surge to about $1.39 a share, or $1.65 a share on an adjusted
basis, according to FactSet data as of Wednesday evening.
REVENUE: Analysts expect revenue to increase to about $2.98
billion, roughly in line with Nvidia's projection of about $3
billion.
Nvidia closed the Mellanox Technologies Ltd. acquisition on
April 27.
What to watch:
PANDEMIC: Nvidia had projected a roughly $100 million impact to
first-quarter revenue from the pandemic. Investors will be looking
how the quarter played out. Also, in March, Chief Financial Officer
Colette Kress said that in China, where the first coronavirus
infections were reported, the company had seen a surge in PC
gameplay as people stayed home. While overall China desktop began
to normalize as retail demand shifted online, it saw an added boost
as iCafes began to reopen. Ms. Kress said they were seeing similar
trends in North America and Europe, though those regions have no
iCafes. Supply-chain disruption, Ms. Kress said at the time, was
also returning to normal.
DATA CENTER: Company officials had pointed to continued strength
from data centers, a view supported by Stifel's data. In an
industry update this week, Stifel noted that data suggests Nvidia's
data center/cloud business was off to a strong start in 2020, with
continued strength in orders going into the September/October
period and noted that cloud/hyperscale spending was driven by
sustained strong demand rather than inventory replenishment or
buffer building.
Write to Maria Armental at maria.armental@wsj.com
(END) Dow Jones Newswires
May 21, 2020 09:14 ET (13:14 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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