Alaric Securities celebrates at Nasdaq MarketSite
November 10, 2017

Nvidia Earnings Roar Past Street Estimates, Shares Rise Almost 4%

Alaric Securities

Nvidia Corp. shares rose almost 4% in premarket trade Friday, extending late-session gains after the Santa Clara, Calif.-based graphic processing unit maker’s quarterly results and revenue outlook topped Wall Street estimates.

Nvidia NVDA shares were last up 3.6%. That follows a 1.8% decline in Thursday’s regular session. Recently, shares hit a record close of $212.03 on Tuesday.

The company reported third-quarter net income of $838 million, or $1.33 a share, compared with $542 million, or 83 cents a share, in the year-ago period. Revenue rose to $2.64 billion from $2 billion in the year-ago period. Analysts surveyed by FactSet had estimated 95 cents a share on revenue of $2.36 billion.

The consensus on Estimize, a software platform that uses crowdsourcing from hedge-fund executives, brokerages, buy-side analysts and others, for adjusted earnings was $1.01 a share on revenue of $2.41 billion.

For the fourth quarter, Nvidia estimates revenue of $2.65 billion, plus or minus 2 percentage points, or $2.6 billion to $2.7 billion. Analysts surveyed by FactSet had forecast revenue of $2.44 billion.

By Thursday’s close, shares had risen 92% year to date, compared with a 43% year-to-date rise in the PHLX Semiconductor index SOX and a more than 15% rise in the S&P 500 index SPX Auto hardware sales the one cylinder that doesn’t fire

Nvidia topped all Wall Street sales estimates in all their product categories save one, reporting a 13% rise in automotive hardware sales to $144 million, shy of the Wall Street consensus view of $158.6 million.

In October, Nvidia unveiled a licensed-plate sized product called the Drive PX Pegasus that has the power of 100 servers in a data center to advance its push into autonomous driving vehicles. Recently, shares dipped after Tesla Inc. TSLA Chief Executive Elon Musk hinted the company may take a new direction with regards to self-driving car hardware, where Nvidia figures as a prominent partner.

In Nvidia’s largest segment, the company reported a 25% rise in gaming revenue to $1.56 billion, above the Wall Street consensus of $1.28 billion.

Data-center revenue more than doubled to $501 million, above the consensus view of $461.1 million. In a conference call, Nvidia co-founder and Chief Executive Jensen Huang said the company has been ramping up its Volta-based data-center products “strongly” this quarter and last quarter.

Huang noted that every major cloud provider, such as Alphabet Inc.’s   GOOG, GOOGL Google, Inc.’s AMZN AWS, Alibaba Group Holding Ltd. BABA, Baidu Inc. BIDU, Tencent Holdings Ltd. 0700, and “even” Oracle Corp. ORCL, has announced support for the Volta-based hardware. Nvidia annoucned a big deal with Chinese-based cloud providers in September, and recently data has shown China driving cloud-based sales growth.

Sales of PC/mobile OEM equipment rose 3% to $191 million, while analysts were looking for $182.2 million on average. One hitch there, however, were sales of cards for mining cryptocurrency. Chief Financial Officer Colette Kress said crypto-related sales accounted for $70 million in the third quarter, compared with $150 million in the second quarter.

Following second-quarter results in August, Huang was very enthusiastic about the cryptocurrency market, but on Thursday’s conference call he appeared a little more subdued, calling it a “small, but not zero, part of our business.”

Data visualization revenue rose 15% to $239 million versus the Street view of $234.9 million.

Article originally publised by Wallace Witkowski at