Nvidia revenue rises 4.5 percent on strong demand for auto chips

Revenue rose 5% to $1.15 billion.

Shares of graphics chip pioneer Nvidia (NVDA) are surging, up $1.95, or nearly 10%, at $22.40, in late trading, after the company this afternoon reported fiscal Q2 revenue and earnings that easily topped expectations, and projected this quarter’s revenue higher as well.

“Our strong performance in a challenging environment reflects NVIDIA’s success in creating specialized visual computing platforms targeted at important growth markets”, Nvidia CEO Jen-Hsun Huang said in a statement.

During the quarter, the company paid $52 million in cash dividends and $400 million in share repurchases.

On average, 25 analysts polled by Thomson Reuters expected earnings of $0.10 per share for the quarter. The Company’s GPU product brands comprise GeForce for gamers; Quadro for designers; Tesla for learning research workers and big-data analysts; and GRID for cloud-based visual computing users.

Nvidia gets a majority of its revenue from its graphic chips made for personal computers.

In her commentary on the results, however, Nvidia CFO Colette Kress said to expect strong revenue again next quarter, along with slightly higher gross margins. Vetr downgraded NVIDIA from a “buy” rating to a “hold” rating and set a $21.33 price objective on the stock.in a report on Wednesday. Analysts surveyed by Zacks had expected $1.13 billion.

Shares of NVIDIA (NASDAQ:NVDA) traded down 0.63% during midday trading on Thursday, reaching $20.45.

Nvidia forecast revenue to fall to $1.16-$1.20 billion in the current quarter from $1.23 billion a year earlier.

On a GAAP basis EPS per diluted share totaled $0.05 which included a charge of $0.19 per share to wind down a modem business and $0.02 per share related to the recall of its Shield tablets. Up to Thursday’s close, they had risen almost 2 percent this year, compared with a near 12 percent fall in the broader Dow Jones US chip index.