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Nvidia Profit Plunges, But Provides Upbeat Revenue Guidance

Nvidia Profit Plunges, But Provides Upbeat Revenue Guidance
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Nvidia Corp. (NVDA: Quote) on Friday reported a 55 percent decline in profit for the first quarter, reflecting lower revenues and higher operating expenses. However, the graphics chipmaker's revenue for the quarter beat analysts' estimates.

Looking ahead, the company forecast revenue for the second quarter well above the Street expectations. The company's shares are gaining more than 9 percent in the pre-market.

Following the June 2011 acquisition of Icera, Nvidia currently offers the two main processors used in smartphones namely the applications processor, in the form of the NVIDIATegra super chip, and the baseband processor, based on Icera technology.

Nvidia, which launched last year the world's first quad-core processor for super phones and tablets, Tegra 3, is betting high on the chip.

Jen-Hsun Huang, president and chief executive officer of Nvidia said, "Kepler GPUs are accelerating our business. Our newly launched desktop products are winning some of the best reviews we've ever had."

Huang added, "Notebook GPUs had a record quarter. And Tegra is on a growth track again, driven by great mobile device wins and the upcoming Windows on ARM launch."

Santa Clara, California-based Nvidia's first-quarter net income was $60.44 million or $0.10 per share, down from $135.22 million or $0.22 per share in the year-ago period.

The latest quarter's results include higher stock-based compensation expense, amortization of acquisition-related intangible assets and other acquisition-related costs compared to the year-ago period.

Excluding items, adjusted net income fell to $97.53 million or $0.16 per share from $165.71 million or $0.27 per share in the same period last year.

On average, 32 analysts polled by Thomson Reuters expected the company to earn $0.10 per share for the quarter. Analysts' estimates typically exclude one-time items.

Revenue for the quarter declined 4 percent to $924.88 million from $962.04 million in the prior-year period, but beat analysts' consensus estimate of $916.17 million.

Revenue declined 3 percent from the preceding tough fourth quarter when results were impacted by the global disk-drive shortage due to flooding in Thailand and a more than expected decline in business for Nvidia's Tegra 2 processor.

Operating expenses in the first quarter rose 18 percent from the year-ago period to $390.54 million.

Looking ahead to the second quarter, Nvidia forecasts revenue of between $990 million and $1.05 billion. Analysts expect revenue for the quarter of $976.20 million.

CEO Huang said, "Graphics is more important than ever. Look for exciting news next week at the GPU Technology Conference as we reveal new ways that the GPU will enhance mobile and cloud computing."

NVDA closed Thursday's trading at $12.42, down $0.09 on a volume of 14.90 million shares. In Friday's pre-market, the stock is adding $1.13 or 9.10 percent to $13.55.

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by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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