Nvidia shares were up 1 percent in extended trading after the company reported its fiscal third-quarter earnings results on Wednesday. The company reported better-than-expected revenue but failed to meet analysts’ estimates on earnings.
For the quarter ending in October, Nvidia reported adjusted earnings of $0.58 per share, below analysts’ estimate of $0.69 per share. Revenue for the fiscal third quarter came in at $5.93 billion, beating the estimate of $5.77 billion from analysts.
The company also mentioned that it projects revenue of $6 billion for the fourth quarter, below analysts’ expectations of $6.09 billion.
Revenue was down 17 percent year on year. Third-quarter gross margin declined by 11.6 percentage points to 53.6 percent. The company blamed this on taking an inventory charge because of reduced demand for data center chips in China. The company said that it expects the gross margin for the ongoing quarter to recover between 63.2 percent and 66 percent.
The past months have been tough for companies like Nvidia as demand continued to drop. The company, like many others around the world, announced that it was going to slow down hiring. According to CEO Jensen Huang in a statement, the company was “adapting to the macro environment.”
The PC gaming market is now experiencing a decline after the boom induced by the pandemic. The company’s graphic cards which were scarce commodities in 2020 and 2021 are now being offered at retail discounts. The company has, however, announced a new generation of graphic cards that costs higher than older models.
The company’s gaming division generated revenue of $1.57, down 51 percent year over year. The company noted that it was selling less to retailers because they have more inventory in their possession than the current demand. It also added that the macroeconomic conditions plus China’s Zero-Covid policy are taking a toll on consumer demand.
The company’s data center segment reported revenue of $3.83 billion, up 31 percent year over year. The company said that this growth was a result of sales to US cloud service providers and consumer internet companies.
The company’s Professional Visualisation segment took a 65 percent hit to $200 million, while its Automotive segment grew 86 percent to $251 million. Its “Other” category generated $73 million in revenue.
The company said it spent $3.75 billion on repurchasing shares and dividends in the fiscal third quarter.
Ibhadojemu Lucky Emmanuel is a graduate of Education and Economics from the University of Benin. He has a passion for tech and business and has been writing professionally for over a period of five years. He's written across various topics and segments and knew tech-business was it when he first stumbled on it. He has a great passion for music and arts, and wants to visit as many countries as he can someday.
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it.
