Nvidia revenue rises 4.5 pct on strong demand for vehicle chips

Nvidia Corporation (NASDAQ:NVDA) is scheduled to disclose its second-quarter of fiscal 2016 (2QFY16) results, after the closing bell today.

“Our gaming platforms continue to be fueled by growth in multiple vectors – new technologies like 4K and VR, blockbuster games with unbelievable production values, and increasing worldwide fan engagement in e-sports”, wrote Nvidia CEO and president Jen-Hsun Huang, in prepared remarks.

Nvidia gets a majority of its revenue from its graphic chips made for personal computers, and there were fears that the fall in PC sales would hurt Nvidia just like it has Intel Corp and Advanced Micro Devices Inc.

Total revenue for the three months ending on July 26 was $1.15bn, which trounced even Wall Street’s most optimistic expectations.

Net income slumped almost 80 percent to $26 million in the quarter due to higher costs and a bigger tax bill. In the same period a year ago, Nvidia reported EPS of $0.30 on revenue of $1.03 billion.

The average estimate among 37 Estimize users was for earnings of $0.15 per share and revenue of $1.02 billion.

The company also saw momentum for its grid graphics virtualization.

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 announcement stems from its focus on gaming, automotive and cloud applications.

Analysts had been modeling $1.01 billion and 21 cents a share. In after hours, the stock gained $1.91 or 9.34% at $22.36. They had risen almost 2 percent this year through Thursday, compared with a 11.6 percent fall in the Dow Jones US chip index.