NVIDIA Corp Earnings: Margins Expand Again, but Profit Drops

S&P 500 (NYSE:SPY) component NVIDIA Corporation (NASDAQ:NVDA) reported its results for the fourth 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 Fourth Quarter

Results: Net income for the semiconductor company fell to $116 million (19 cents per share) vs. $171.7 million (29 cents per share) a year earlier. This is a decline of 32.4% from the year earlier quarter.

Revenue: Rose 7.5% to $953.2 million from the year earlier quarter.

Actual vs. Wall St. Expectations: NVIDIA Corporation reported adjusted net income of 26 cents per share. By that measure, the company beat the mean estimate of 19 cents per share. Analysts were expecting revenue of $950.5 million.

Quoting Management: “I am pleased with our achievements last year. Our GPU business grew sharply. And, with the success of Tegra, we established our position in the mobile market,” said Jen-Hsun Huang, president and chief executive officer of NVIDIA. “We expect continued growth ahead, as Tegra three powers a new wave of quad-core super phones and Kepler, our next-generation GPU architecture, sets new standards in visual and parallel computing.”

Key Stats:

Last quarter marked the fifth consecutive quarter of gross margins expanding as the company’s gross margin expanded 3.3 percentage points to 51.4% from the year earlier quarter. Over that span, margins have grown on average 10.5 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 3 cents in the third quarter, by one cent in the second quarter, and by 3 cents in the first quarter.

Revenue has now gone up for three straight quarters. In the third quarter, revenue rose 26.3% to $1.07 billion while the figure rose 25.3% in the second quarter from the year earlier.

Looking Forward: Over the past ninety days, the average estimate for the first quarter of the next fiscal year has fallen from 23 cents per share to 18 cents, indicating that analysts are growing pessisimistic about the company’s performance next quarter. At 95 cents per share, the average estimate for the fiscal year has fallen from $1.02 ninety days ago.

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

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To contact the reporter on this story: Derek Hoffman at staff.writers@wallstcheatsheet.com

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