NVIDIA Corporation (NASDAQ: NVDA) plans to release its third quarter financial results on Nov.7. The graphics chip maker company will host a conference call on the same day at 2 p.m. PT (5 p.m. ET) to discuss the operating performance for the third quarter.
Wall Street expects Nvidia to earn 20 cents a share, according to analysts polled by Thomson Reuters. The consensus estimate implies a drop of 39.4 percent from last year when it earned 33 cents a share. The consensus estimate has declined by 2 cents in the past three months.
Quarterly revenues are projected to drop 12.6 percent to $1.05 billion from $1.20 billion in the same quarter last year. Nvidia expects third quarter revenue to be $1.050 billion, plus or minus 2 percent.
Nvidia has two key segments - Graphics Processing Unit (GPU) business and Tegra. The GPU business includes GeForce graphics chips and cards for PCs, Tesla graphics for super-computing applications, Quadro for computer-aided design or medical imaging). GPU accounts for more than 70 percent of sales.
The second is the Tegra line of mobile system-on-a-chip (SoC) processors. Tegra integrates a CPU, GPU, and memory controller onto a single chip that powers smartphones and tablets. Last year, Tegra accounted for 18 percent of total revenues.
Investors will be keeping a close eye on GPU unit performance amid declining PC sales as the segment primarily caters to PCs. The GPU unit's revenue grew only 2 percent in 2012, and, in fact, sales fell 3 percent over the past 3 years. The company's GPU business had second quarter revenue of $858.6 million, up 7.5 percent from a year earlier.
Meanwhile, Tesla chips have gained traction in supercomputing space, and the market would welcome if there is any positive momentum in Tesla sales.
Another focus point could be Tegra, which is considered as the next leg of growth for Nvidia. Wall Street will be watching for customer signings on the smartphone front as it faces cut throat competition from market ! leader Qualcomm, Inc. (NASDAQ: QCOM). Tegra Processor business generated revenue of $52.6 million in the second quarter, down 70.7 percent year over year.
Gross margin is another key metric. Reported and adjusted gross margins for the third quarter are expected to be approximately flat relative to the prior quarter at 56 and 56.3 percent, respectively.
The magnitude of the upcoming Tegra 4 ramp may impact margins of Nvidia. Margins are particularly susceptible to oscillate in the second half of 2013 given that to what extent a rebounding lower-margin Tegra business is going to offset growing Tesla adversely, and to a lesser extent, GRID sales. So, investors should focus on margin commentary.
Meanwhile, GRID interest is encouraging. Thus far, GRID is being well-received in the marketplace as customer sign-ups and trails are increasing with material revenue generation likely still several quarters out. Recently, Amazon Web Services has deployed GRID GPUs.
Top 5 Blue Chip Companies To Buy Right Now
In addition, the street could be looking for updates on Project Shield, a unique Android gaming device that is expected to ship in the second quarter of fiscal 2014.
Moreover, the outlook for the fourth quarter revenue would be closely monitored, and it may decide the movement of the stock depending upon how it fares with the street's view of 22 cents in earnings and $1.09 billion in revenue.
For the second quarter ended July 28, 2013, the Santa Clara, California-based company reported net income of $96.4 million, or 16 cents a share, compared to $119.0 million or 19 cents a share for the year-ago quarter. Excluding items, it earned 23 cents a share. Revenue for the second quarter fell 6.4 percent to $977.24 million.
Gross margin for the quarter improved to 55.8 percent from 51.8 percent a year ago while adjusted gross margin increased to 56.3 percent from 52.0 percent la! st year.
Out of 32 analysts covering the stock, seven analysts have a rating of "strong buy" or "buy," while 22 analysts recommend "hold." Three analysts have a "sell" rating on the stock, which has traded between $11.15 and $16.10 during the past 52-weeks.
No comments:
Post a Comment