Nvidia beats estimates as it expands into the cloud
Nvidia reported results for the April quarter that exceeded analyst expectations, as the company's customers favored its high-end graphics chips as well as new products for the data center.
Nvidia reported profits of $136.5 million, or 24 cents per share on revenue of $1.1 billion. Profits increased 46 percent from a year ago, while revenues climbed 16 percent. Analysts polled by Yahoo Finance had expected earnings of 19 cents on revenue of $1.08 billion.
Nvidia's gains were across-the-board, save for its graphics chips that were sold into notebooks, which showed declines as the overall notebook PC market fell. In general, Nvidia's GPU business grew by 14 percent to $898 million, with high-end GeForce GTX GPUs climbing 57 percent. Quadro workstation GPU sales increased, as did sales of Nvidia's Tesla chips for data centers and supercomputers. Sales of Nvidia's Grid, the company's cloud solution, were "up strongly" from the prior year's initial quarter of sales.
"First quarter results benefited from gains in PC gaming and our continued progress in the data center and cloud," said Jen-Hsun Huang, president and chief executive officer of Nvidia, in a statement. "Nearly 600 enterprises worldwide are now evaluating Grid, our virtual GPU server platform. VMware announced support for Grid to enable GPU-accelerated enterprise virtualization. And with IBM, Dell and HP now selling our GPUs in their high-volume servers, we expect large-scale data centers to be a significant source of growth."
Sales of the Tegra embedded chips, where Nvidia is trying to make inroads into the mobile and auto infotainment business, grew 35 percent, driven by growth in both areas, Nvidia said. Nvidia also earned $66 million through a patent license agreement with Intel.
Nvidia's forecast, however, is for flat revenue of $1.1 billion, plus or minus two percent, the company said.