Nvidia's 1Q Profit Expected to More Than Double Driven by Gaming, Data Center Demand Amid Pandemic -- Earnings Preview

   By Maria Armental

Graphics chip-making giant Nvidia Corp. is slated to report first-quarter results on Thursday, offering an early view into the impact of the coronavirus pandemic on its operations. Here's what you need to know:

PROFIT: Analysts expect profit for the quarter ended April 26 to surge to about $1.39 a share, or $1.65 a share on an adjusted basis, according to FactSet data as of Wednesday evening.

REVENUE: Analysts expect revenue to increase to about $2.98 billion, roughly in line with Nvidia's projection of about $3 billion.

Nvidia closed the Mellanox Technologies Ltd. acquisition on April 27.

What to watch:

PANDEMIC: Nvidia had projected a roughly $100 million impact to first-quarter revenue from the pandemic. Investors will be looking how the quarter played out. Also, in March, Chief Financial Officer Colette Kress said that in China, where the first coronavirus infections were reported, the company had seen a surge in PC gameplay as people stayed home. While overall China desktop began to normalize as retail demand shifted online, it saw an added boost as iCafes began to reopen. Ms. Kress said they were seeing similar trends in North America and Europe, though those regions have no iCafes. Supply-chain disruption, Ms. Kress said at the time, was also returning to normal.

DATA CENTER: Company officials had pointed to continued strength from data centers, a view supported by Stifel's data. In an industry update this week, Stifel noted that data suggests Nvidia's data center/cloud business was off to a strong start in 2020, with continued strength in orders going into the September/October period and noted that cloud/hyperscale spending was driven by sustained strong demand rather than inventory replenishment or buffer building.

Write to Maria Armental at maria.armental@wsj.com

(END) Dow Jones Newswires

May 21, 2020 09:14 ET (13:14 GMT)

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