Jen-Hsun Huang, President and Chief Executive Officer of Nvidia Corp., speaks at the company’s event at the Mobile World Congress Americas in Los Angeles on October 21, 2019.
Patrick T. Fallon | Bloomberg | Getty Images
Shares of graphics card maker Nvidia fell slightly in expanded trading on Wednesday after the company reported better-than-expected fiscal revenue in the second quarter and guidance for quarterly revenue.
Here’s how the company did:
- Earnings: $ 2.18 per share, adjusted, vs. $ 1.97 per share as expected by analysts, according to Refinitiv.
- Income: $ 3.87 billion, vs. $ 3.65 billion as expected by analysts, according to Refinitiv.
Overall revenue rose 50% year-on-year in the quarter ended July 26, according to a statement. Revenue grew 39% in the previous quarter.
The company’s gaming company generated $ 1.65 billion in revenue, up 26% year over year and above the $ 1.41 billion consensus estimate among researchers surveyed by FactSet. Even when people spent more time playing games during the coronavirus pandemic, Nvidia ended up with more data center revenue than gaming revenue for the first time, at $ 1.75 billion. The unit’s revenue was up 167% and above the $ 1.71 billion FactSet consensus estimate.
This follows the $ 1 billion milestone in fiscal first quarter revenue for the enterprise data center, which includes sales of graphics processing units that power artificial intelligence workloads for business use. The company is growing that business as it reduces its confidence in the video game market and continues to supply products to cloud providers such as Amazon, and through acquisitions.
The data center business includes a contribution from Mellanox, a company that makes Ethernet switches and other network sharing. Nvidia closed its $ 7.13 billion purchase of Mellanox in the quarter, the largest deal in Nvidia’s 27-year history. Mellanox contributed 14% of Nvidia’s total revenue in the fiscal second quarter.
Also in the quarter, Nvidia said it had begun “complete production” of the first graphics card based on its Ampere architecture, the A100 for data center use. Ampere gaming cards will come later; Nvidia will host a virtual event for its GeForce gaming brand on September 1st.
Two smaller parts of Nvidia, professional visualization and automotive, were taken down in the quarter because the pandemic affected business. Business experts put off purchases from workstations, and the production supply of cars was lower than normal, Nvidia said.
“Sales were hurt by lower demand from the company and the closure of many offices around the world,” Colette Kress, Nvidia’s chief financial officer, said in a conference call with analysts. “Industries have been negatively impacted over the four years including automotive, architectural engineering and construction, manufacturing and video and entertainment and oil and gas.”
Nvidia requested $ 4.40 billion in revenue in the fiscal third quarter, which would add up to 46% growth in the mid-range. Analysts surveyed by Refinitiv had $ 3.97 billion in revenue for the quarter.
Nvidia shares have been up 106% since the beginning of the year, while the S&P 500 index is up 4%.
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