By Noel Randewich
SAN FRANCISCO Nov 7 Nvidia Corp gave a
revenue forecast for the current quarter that was shy of Wall
Street's expectations as the graphics chipmaker faces tough
competition in tablets and a slow personal computer market.
With the personal computer industry losing steam, Nvidia has
expanded its graphics chips into mobile devices, but it is
meeting stiff competition from Qualcomm In c and other
In the third quarter, revenue from Nvidia's Tegra mobile
business fell 54 percent and revenue from its PC graphics chip
business declined 2 percent.
The company expects its mobile chip business, called Tegra,
to remain flat this year as it focuses on integrating Long Term
Evolution (LTE) features on upcoming components, making them
compatible with high-end carrier networks and more attractive to
Nvidia's lighter-than-expected revenue forecast follows
other chipmakers that have failed to impress analysts. RBC
analyst Doug Freedman said a post-earnings gain in Nvdia's stock
was likely caused by some investors having expected a lower
"We've been hard pressed to find anyone to beat numbers for
Q4," Freedman said.
Several semiconductor companies, including Texas Instruments
Inc, Intel Corp and Qualcomm, have given
current-quarter revenue forecasts in recent weeks that
disappointed Wall Street, raising concerns that manufacturers of
industrial and consumer devices might have overestimated the
Nvidia's most recent Tegra 4 chips are being used in
Microsoft's Surface 2 tablet and a smartphone made by Xiaomi in
Nvidia's PC graphics chips are often used in high-end laptop
and desktop computers favored by gamers. The move by consumers
to tablets has hurt those premium PCs less than cheaper
versions, but rivals such as Advanced Micro Devices Inc
and Intel are competing heavily in that niche.
Also in its report on Thursday, the company announced a 13
percent increase in its quarterly dividend, and said its board
authorized an additional $1 billion for its stock repurchase
Revenue was $1.054 billion and net income $119 million, or
20 cents a share, in the third quarter ended in October,
compared with $1.204 billion and $209 million, or 33 cents a
share, in the year-ago quarter. Adjusted EPS in the third
quarter was 26 cents.
It said revenue in the fourth quarter would be $1.05
billion, plus or minus 2 percent.
Analysts on average expected revenue in the third quarter,
which ended in October, of $1.052 billion and fourth-quarter
revenue of $1.083 billion, according to Thomson Reuters I/B/E/S.
Nvidia shares were up 2.7 percent in extended trading after
closing down 2.38 percent at $14.55 on Nasdaq.