NVIDIA Corp Earnings Cheat Sheet: Margins Keep Growing, Net Income Climbs

S&P 500 (NYSE:SPY) component NVIDIA Corporation (NASDAQ:NVDA) reported net income above Wall Street’s expectations for the third quarter. NVIDIA provides visual computing technologies that generate interactive graphics for computers, mobile devices, and gaming consoles.

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NVIDIA Earnings Cheat Sheet for the Third Quarter

Results: Net income for the semiconductor company rose to $178.3 million (29 cents per share) vs. $84.9 million (15 cents per share) in the same quarter a year earlier. This is a more than twofold rise from the year earlier quarter.

Revenue: Rose 26.3% to $1.07 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: NVDA beat the mean analyst estimate of 26 cents per share. Analysts were expecting revenue of $1.06 billion.

Quoting Management: “NVIDIA’s strategy is coming into its own, as the world becomes increasingly visual and mobile,” said Jen-Hsun Huang, president and chief executive of NVIDIA. “Our GPU business accelerated in the third quarter, driven by strong demand from gamers and the professional market. And our mobile business benefited from new devices coming onto the market.”

Key Stats:

Last quarter marked the fifth consecutive quarter of gross margins expanding as the company’s gross margin expanded 5.8 percentage points to 52.2% from the year earlier quarter. Over that span, margins have grown on average 10.4 percentage points per quarter on a year-over-year basis.

The company has now topped analyst estimates for the last four quarters. It beat the mark by one cent in the second quarter, by 3 cents in the first quarter, and by 2 cents in the fourth quarter of the last fiscal year.

The company’s revenue has now risen for two straight quarters. In the second quarter, revenue increased 25.3% to $1.02 billion from the year earlier quarter.

Looking Forward: The outlook for the company’s results in the upcoming quarter is unfavorable. The average estimate for the fourth quarter is 26 cents per share, down from 29 cents ninety days ago. The average estimate for the fiscal year is 99 cents per share, down from $1.03 ninety days ago.

Competitors to Watch: Advanced Micro Devices, Inc. (NYSE:AMD), Intel Corporation (NASDAQ:INTC), Texas Instruments Inc. (NYSE:TXN), Broadcom Corporation (NASDAQ:BRCM), QUALCOMM, Inc. (NASDAQ:QCOM), Microsoft Corporation (NASDAQ:MSFT), Silicon Image, Inc. (NASDAQ:SIMG), Pixelworks, Inc. (NASDAQ:PXLW), Marvell Tech. Group Ltd. (NASDAQ:MRVL), and ARM Holdings plc (NASDAQ:ARMH).

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)


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