Management forecast higher sales for this quarter than Wall Street had been expecting.
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Stock in the graphics-chip maker Nvidia stock climbed as the company beat earnings expectations amid booming demand for its chips, especially those destined for use in videogames. The sharp rise in buying interest has contributed to a global shortage of chips affecting a range of industries from auto makers to smartphone manufacturers.
Nvidia (ticker: NVDA) shares gained 2.5% in the extended session Wednesday.
Nvidia reported fiscal fourth-quarter net income of $1.46 billion, which amounts to $2.31 a share, compared with a net profit of $950 million, or $1.53 a share, in the year-earlier period. Adjusted for stock compensation, among other things, the company reported earnings of $3.10 a share. Sales rose 61% to $5 billion.
Analysts had expected adjusted earnings of $2.81 a share and sales of $4.82 billion.
Long known for its videogame-graphics chips and cards, Nvidia reported a record $2.5 billion in sales for the segment during the fourth quarter. Analysts had predicted sales of $2.39 billion.
In prepared remarks, Nvidia CFO Colette Kress wrote that the segment saw higher sales across chips for desktops, laptops, and game consoles—Nvidia makes chips that power Nintendo ‘s Switch product. The company said it benefited from a new generation of Ampere-based chips that it announced last year.
“Throughout our supply chain, stronger demand globally has limited the availability of capacity and components, particularly in gaming,” Kress said.
In the earnings release, Nvidia said it expected fiscal first-quarter sales of $5.30 billion, plus or minus 2%. The company’s fiscal first quarter ends in April. The consensus call among analysts was that sales would come in at $4.5 billion, for adjusted per-share earnings of $2.52.
Nvidia reported data center sales grew 97% to $1.9 billion—which includes sales from its Mellanox unit, and was in line with the consensus estimate of $1.9 billion. Mellanox contributed roughly 10% of Nvidia’s overall revenue, Kress said.
The company reported professional visualization sales fell 7% to $307 million. Fourth-quarter sales in its automotive segment declined 11% to $145 million, although they were 16% higher than in the previous quarter.
Chip shortages have hampered the automotive sector in recent weeks, as auto makers struggle to secure adequate supplies. Several large car businesses have been forced to halt production at certain factories as a result. Kress said that the Covid-19 pandemic is no longer having a significant effect on demand for Nvidia’s automotive products.
Shares of Nvidia have advanced more than 120% in the past year, as the PHLX Semiconductor index gained 82%. The stock is one of the most expensive by forward earnings in the PHLX.
Write to Max A. Cherney at [email protected]
