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UPDATE 3-Nvidia profit rises on brisk graphics chip sales
February 14, 2008 / 12:19 AM / 10 years ago

UPDATE 3-Nvidia profit rises on brisk graphics chip sales

(Adds additional comments from conference call, analyst expectations for just-reported quarter)

SAN FRANCISCO, Feb 13 (Reuters) - Nvidia Corp (NVDA.O) forecast a “better-than-seasonal” current quarter after fourth- quarter profit surged on sales of graphics chips, including its GeForce processors, sending shares higher by 4 percent.

Its shares added to gains market in regular trade after No. 1 chip-making equipment supplier Applied Materials Inc said that orders in its current quarter could rise as much as 5 percent. The Philadelphia Semiconductor Index .SOXX gained 3 percent on the day.

Fourth-quarter net income rose 57 percent to $257 million, or 42 cents per share, from $163.5 million, or 27 cents per share, a year ago. Revenue rose 37 percent to $1.20 billion.

Excluding stock-based compensation and other items, Nvidia said on Wednesday it had a profit of $292.6 million, or 49 cents per share. According to Reuters Estimates, excluding in-process research and development and acquisition-related charges, Nvidia had a per-share profit of 43 cents, compared with the 41 cent-per-share profit analysts had expected.

Chief Executive Jen-Hsun Huang said the company saw strong demand for its graphics processing units in all market segments. Its discrete graphics business, which makes chips used separately to enhance display of graphics, increased sales by 80 percent.

Chief Financial Officer Marvin Burkett said on a conference call he expected a “better-than-seasonal” current quarter and that it would decline slightly from the prior period.

Analysts currently expect first-quarter revenue of $1.11 billion, according to Reuters Estimates. In the just-reported fourth-quarter, the company had revenue of $1.20 billion.

Huang said the ever-increasing use of rich graphics in applications from Google Earth to Apple iTunes has been spurring demand.

Nvidia shares rose 4.2 percent to $28.15 in after-hours trading after closing up $1.02, or 3.9 percent, at $27.02. In the past 12 months, the stock is up about 17 percent, outperforming the Philadelphia Semiconductor Index, which is down about 23 percent in the same period. (Reporting by Duncan Martell; Editing by Braden Reddall/Andre Grenon)

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