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Nvidia Profit Tops Estimate, Details Weak Q4 Outlook


Nvidia Corp. (NVDA) Thursday reported a better-than-expected third-quarter profit, mostly on continued demand for its Tegra chips used in smartphones and tablets, as well for its graphic processing units. However, the company detailed a downbeat revenue outlook for the fourth quarter.

Nvidia assuaged investors by initiating a quarterly cash dividend of 7.5 cents per share, and also extended its share-repurchase program. The company's shares rose more than one percent in after-hours trade on the Nasdaq.

CEO Jen-Hsun Huang said, "Investments in our new growth strategies paid off this quarter in record revenues and margins."

"Kepler GPUs are winning across the special-purpose PC markets we serve, from gaming to design to supercomputing. And Tegra is powering some of the most innovative tablets, phones and cars in the market," added Huang.

Nvidia specializes in graphics processing units and mainly competes with Advanced Micro Devices Inc. The company has also been making inroads into the mobile computing market through its Tegra chips.

During the quarter, Microsoft launched its Nvidia Tegra 3-based Surface RT, while Nvidia's new energy-efficient Kepler GPU architecture continued to make headway.

Santa Clara, California-based Nvidia reported third-quarter net income of $209 million or $0.33 per share, compared with $178 million or $0.29 per share last year.

Excluding items, adjusted earnings for the quarter were $246 million or $0.39 per share, compared with $217 million or $0.35 per share a year ago.

On average, thirty analysts polled by Thomson Reuters expected the company to report earnings of $0.30 per share for the quarter.

Nvidia reported quarterly revenues of $1.204 billion, up nearly 13 percent from $1.066 billion in the prior year. Thirty-three analysts on consensus estimated revenues of $1.19 billion for the quarter.

Nvidia has forecast fourth-quarter revenues of $1.025 billion to $1.175 billion, while analysts currently expect revenues of $1.21 billion.

Nvidia's quarterly dividend of 7.5 cents per share will be payable on December 14 to shareholders of record on November 23.

The company is extending its existing $2.7 billion share-repurchase program, initiated in August 2004, through December 2014. Nvidia is authorized to spend up to an additional $1.24 billion repurchasing shares of its common stock.

NVDA closed Thursday at $12.68, up $0.07 or 0.56%, on a volume of 20.78 million shares. In after hours, the stock gained $0.22 or 1.74%. In the past year, the stock trended in a range of $11.63 - $16.90, with a three-month average volume of 10.66 million shares.

by RTTNews Staff Writer

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