* Fourth-quarter net was $174 mln, or 28 cents EPS
* Q1 revenue forecast at $940 mln vs est of $1.07 bln
By Noel Randewich
SAN FRANCISCO, Feb 13 Nvidia posted
higher fiscal fourth-quarter earnings but its revenue outlook
for the current quarter missed expectations as the graphics
chipmaker faces more competition in a growing tablet market
where it hopes to offset soft PC demand.
With PC sales losing ground to tablets, Nvidia is betting on
its graphics expertise to make high-performance processors for
The company, whose core business is graphics chips for PCs,
made inroads in tablets last year but competition from larger
rival Qualcomm has Wall Street concerned the company
may struggle to keep its mobile business growing fast.
"Looks like some of those products didn't have as strong an
end of year as some might have expected and that they're now
burning inventory," Cody Acree, an analyst at Williams
Financial, said in reaction to Nvidia's revenue guidance.
Microsoft's long-awaited launch of Windows 8 in
October brought touchscreen features to laptops but failed to
spark a resurgence in sales that Nvidia and other PC chipmakers
and manufacturers had hoped for.
Nvidia's traditional PC graphics chip business, which
accounts for most of the company's revenue, grew 7 percent
versus the year-ago quarter after the company gained market
Nvidia's Tegra 3 mobile processor is used in Google's
Nexus 7, one of only a handful of tablets to make
inroads against Apple's iPads. The Tegra 3 chip is also
used in Microsoft's Surface Windows RT tablet.
But some analysts worry Nvidia may struggle to maintain
growth with new design wins for its upcoming Tegra 4 chip as
Nvidia's Tegra group, the bulk of which comes from Tegra
sales, grew 90 percent, year over year, to $208 million.
The company also said it expects to break ground this year
on a new building at its headquarters to accommodate growth.
Fourth-quarter net income was $174 million, or 28 cents a
share, up from $116 million, or 19 cents a share, in the same
quarter last year. Analysts on average expected 24 cents,
according to Thomson Reuters I/B/E/S.
The Santa Clara, California, chipmaker reported
fourth-quarter revenue of $1.107 billion, up from $953 million
in the year-ago quarter.
It said revenue in the current quarter would be $940
million, plus or minus 2 percent.
Analysts were expecting revenue of $1.102 billion for the
quarter ended in January and $1.067 billion for the quarter
ending in April.
Shares of Nvidia were unchanged in extended trade after
closing down 0.48 percent at $12.37 on Nasdaq.