Nvidia Earnings Rise, as Coronavirus Lifts Games and Remote Services -- Update
May 21 2020 - 6:46PM
Dow Jones News
By Asa Fitch
Strong growth in computer games and remote computing services,
driven by people stuck at home during the coronavirus pandemic,
lifted earnings for chip maker Nvidia Corp.
First-quarter revenue rose 39% from a year earlier to $3.08
billion, the Santa Clara, Calif.-based company said Thursday.
Earnings per share totaled $1.47, more than double last year's
figure.
"As the virus spread globally, much of the world started working
and learning from home and gameplay surged," Chief Financial
Officer Colette Kress told analysts. The company recorded a 50%
increase in hours played on its games platform, as well as booming
sales of laptops and game consoles using Nvidia chips, she
said.
"Animal Crossing," a world-building game, set sales records
after its launch on the Nintendo Switch console in March. The
Switch console that uses Nvidia chips has been popular, too,
topping internal forecasts with over three million sold in the
first quarter, Nintendo said this month.
Nvidia has also benefited from a shift toward cloud computing,
driven by workers logging on from home and increasingly relying on
remote computing power. Microsoft Corp., a leading cloud-computing
competitor, last month reported an earnings jump partly from
computing demand tied to the health crisis. Many of Nvidia's chips
are sold to data centers, where they make rapid calculations that
power artificial intelligence.
The company said its data-center sales rose 80% to a record
$1.14 billion. Revenue at the games segment increased 27% to $1.34
billion.
Nvidia's results provide an indication of how some corners of
the tech industry might be more resilient than others to the impact
of the prolonged effects of the pandemic. The results reported by
most major U.S. tech companies in recent weeks covered the first
three months of the year, and reflect only a few weeks of
quarantine measures rolled out across much of the country in March.
Nvidia's latest earnings cover the February-through-April period,
offering a broader look at the pandemic's impact.
The company's rollout of new products has continued apace
despite the global health crisis. Earlier this month, Chief
Executive Jensen Huang revealed an advanced graphics-processing
chip design and a new type of chip aimed at accelerating
artificial-intelligence calculations in data centers.
Nvidia issued guidance for the current quarter, which ends in
July, of about $3.65 billion in sales, above analysts' $3.25
billion average forecast in a FactSet survey. The company said its
forecast reflects Nvidia's purchase of Mellanox Technologies Ltd.
for about $7 billion, which was announced last year and closed late
last month.
The company's results for the April quarter beat Wall Street
projections. Analysts had expected sales of $2.98 billion and
earnings per share of $1.39.
Nvidia's shares traded mixed in after-hours trading. The stock
had surged about 30% since it last reported earnings.
The company said it was evaluating when it would resume a
share-buyback program it had suspended during the acquisition of
Mellanox, adding that it would act "based on market
conditions."
Write to Asa Fitch at asa.fitch@wsj.com
(END) Dow Jones Newswires
May 21, 2020 18:31 ET (22:31 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
NVIDIA (NASDAQ:NVDA)
Historical Stock Chart
From Aug 2024 to Sep 2024
NVIDIA (NASDAQ:NVDA)
Historical Stock Chart
From Sep 2023 to Sep 2024