NVIDIA Beats Q2 Views, Shares Jump

NVIDIA‘s revenue increased 4.5% in the quarter, which starkly contrasts analysts’ expectations of an 8% decrease in revenue. In the same period a year ago, Nvidia reported EPS of $0.30 on revenue of $1.03 billion.

Following a recall of some of its Shield tablets last week, Nvidia published solid second quarter financial results after the bell on Thursday.

Net income fell to $26 million, or 5 cents per share, from $128 million, or 22 cents per share. On average, equities research analysts forecast that NVIDIA will post $0.76 earnings per share for the current year.

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

For one thing, Nvidia is still in the process of writing down its Icera wireless modem business, which in May it said it would scrap after failing to find a buyer for it. It ate $103m in restructuring and other charges in Q2 related to that wind-down, and it said it expects to write down another $15m to $25m in the third quarter.

The company also saw momentum for its grid graphics virtualization. The business had revenue of $1.15 billion for the quarter, compared to analyst estimates of $1.01 billion.

Nvidia may be making up for some of the revenue its losing in the shrinking PC market with increasing orders for chips used in high-end desktops.

During the quarter, Nvidia saw strong demand for its GeForce GTX gaming processors, driven by advanced new games and growth in competitive e-sports; and more users embraced the GeForce Experience PC gaming platform. NVIDIA- branded products and services are visual computing platforms that address four marketplaces: Automotive, Business, High Performance Computing & Cloud, and Gaming. Analysts polled by Thomson Reuters project $1.1 billion. Stockholders of record on Thursday, August 20th will be issued a $0.0975 dividend.

That seemed to suit investors just fine, and they boosted the company’s share price by almost 9 per cent in extended trading on the news. NVIDIA has a 52 week low of $16.77 and a 52 week high of $23.61.