Nvidia (NVDA) third quarter 2023 results

Nvidia released fiscal third-quarter results for the period ending in October on Wednesday, with sales beating analysts’ expectations but earnings per share emerging in the light.

Nvidia stock rose 1% in extended trading.

Here’s how the company fared against Refinitiv’s consensus estimates:

  • PES: $0.58, adjusted, vs. $0.69 expected
  • Revenue: $5.93 billion, vs. $5.77 billion expected

Nvidia said it expects about $6 billion in sales in the fourth quarter, which is below Refinitiv’s consensus estimate of $6.09 billion.

Third-quarter gross margin fell 11.6 percentage points to 53.6%, which the company attributed to supporting an inventory load due to weak demand for data center chips. data in China. Turnover is down 17% over one year.

NVIDIA DRIVE Thor, the company’s next-generation centralized computer for autonomous and assisted driving and in-car infotainment, is shown in a document image obtained September 20, 2022.

Nvidia | via Reuters

Nvidia expects current quarter gross margin to recover to between 63.2% and 66.0%.

Nvidia is closely watched by analysts and investors as a leading indicator of the health of the tech industry, as it sells chips and software to numerous PC makers and cloud providers.

In recent months, chip companies such as Nvidia have lowered order expectations and warned that their customers are overloaded with computer parts. In May, Nvidia announced that it would slow the pace of its hiring.

Nvidia CEO Jensen Huang said in a statement that the company is “adapting to the macro environment.”

PC gaming market slows after pandemic boom. Nvidia graphics cards, which had been hard to find in stock in 2020 and 2021, are now enjoying retail discounts. Nvidia also recently announced a new generation of graphics cards that are priced higher than previous models.

Nvidia’s games division reported revenue of $1.57 billion, down 51% year-over-year. Nvidia said it was selling less to retailers because they had more inventory than current demand. He said macroeconomic conditions, in addition to China’s zero Covid policy, are hurting consumer demand.

Nvidia’s data center business, which reported revenue of $3.83 billion, grew 31% year-over-year. Nvidia attributed the growth to sales to US cloud service providers and consumer internet companies.

In July, Nvidia reduced its guidance for the October quarter. Nvidia also warned in August that it would be hit by U.S. export controls that prevent the sale of some fast artificial intelligence chips to Chinese companies. In November, he revealed a new chip designed to meet US export rules.

Nvidia said lower sales of banned GPUs in China would be more than offset by its alternative products.

Nvidia has a few smaller business lines, including professional visualization and automotive chips. They are small. Professional viewing fell 65% year on year to $200 million. Automotive grew by 86%, but remains very modest, with sales of $251 million.

The company’s “other” category brought in $73 million in revenue. It includes Nvidia’s cryptocurrency mining (CMP) chips. The company said sales of the CMP chips were “nominal”.

“We believe that the recent transition of Ethereum cryptocurrency transaction verification from proof-of-work to proof-of-stake has reduced the usefulness of GPUs for cryptocurrency mining,” the company said.

Nvidia said it spent $3.75 billion on stock buybacks and dividends during the quarter.

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