Nvidia Forecasts Revenue Beyond Estimates Despite Coronavirus
Nvidia on Thursday forecast first-quarter revenue above Wall Street expectations, despite a $100 million hit from the coronavirus outbreak, shooting its shares up nearly 7 per cent in extended trading.
The company, which reinforced expectations of a rebound in chip demand and recently launched an online game streaming service, is the second chipmaker after Qualcomm to warn about the potential impact on its businesses due to the fatal outbreak.
The virus has so fall claimed 1,367 lives, infected around 60,000 people on the Chinese mainland and spread to at least 24 countries. It’s led to a lockdown of cities, including Wuhan in China where the virus started, a travel ban from China to Australia for this upcoming week, and led to factory closures that have disrupted supply chains.
The California-based company said it expects current-quarter revenue of US $3 billion, give or take 2 per cent, which exceeds analysts’ expectation of $2.86 billion, according to IBES data from Refinitiv.
Revenue from Nvidia’s closely watched data centre chips business rose 42.6 per cent to US $968 million in the fourth quarter, beating analysts’ estimate of US $829 million, according to research firm FactSet.
Revenue from its gaming streaming business, GeForce, still the biggest contributor to sales, rose 56 per cent to US $1.49 billion, but fell short of analysts’ estimate of US $1.52 billion, according to FactSet.
Total revenue in the quarter rose about 41 per cent to US $3.11 billion, above analysts’ estimate of US $2.97 billion, according to IBES data from Refinitiv.
Nvidia’s net income rose to US $950 million, or US $1.53 per share, in the fourth-quarter ended 31 December, from US $567 million – or 92 cents per share, 12 months earlier.
Excluding items, it earned US $1.89 per share, which was also above estimates of US $1.69.