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Nvidia (NVDA) predicted that sales growth would become temporarily negative.
Thursday afternoon, the GPU giant announced a turnover of 3.18 billion dollars (up 21% per annum) for the quarter of October (third fiscal quarter) and a BPA of $ 1.84, as well as consensus analyst estimates of $ 3.24 billion and $ 1.93. GAAP EPS, benefiting from a one-time tax advantage of $ 138 million, amounts to $ 1.97 against a consensus of $ 1.71.
Importantly, Nvidia also guided for its turnover in January its turnover of 2.7 billion dollars, plus or minus 2%. This is well below a consensus of $ 3.4 billion and implies a 7% annual revenue drop at mid-term.
Nvidia shares, which had already fallen sharply in October, fell by 16.8% to 168.45 USD after normal trading hours, leaving them at levels not seen in the summer of 2017. Competition on the AMD GPU (AMD) fell 5.1% and Intel (INTC) fell 0.8%.
Here are some points to remember from Nvidia's report on results and calls.
1. Nvidia Expects Very Low Midrange GPU Deliveries This Quarter
Three months ago, Nvidia experienced a significant drop in GPU demand specifically for cryptocurrency miners. Echoing AMD's October remarks about its near-term GPU sales, Nvidia says deliveries of its mid-range GPUs at Pascal architecture have been hit hard by a stock-overs, so that the demand for products for the mining sector has collapsed and the demand for players has not grown fast enough to take over, the prices of graphics cards remained high.
Nvidia, whose total revenue of the Game of Chance segment amounted to 1.76 billion dollars (+ 13%) did not reach the consensus of 1.89 billion dollars, but this problem will take "one to two quarters "to be corrected. On the call, CEO Jensen Huang has estimated that between Nvidia and "the other brand" (a reference to AMD), there remained more than 12 weeks of inventory of medium-term distribution channels to burn, and that its The company decided not to sell its GeForce GTX 1060 graphics processor (PDSF for the graphics card at $ 249) this quarter.
Huang, however, added that he "hoped" that players' demand would improve this holiday season, now that average prices have stabilized, paving the way for rebounding Nvidia deliveries once 39, channel inventory will be exhausted. "I guess when prices are volatile in the chain, some people are probably waiting for prices to stabilize," he said. "But now that the levels are correct, we expect the market to return to normal."
2. The lower demand of the console processor also weighs
CFO Colette Kress said Nvidia expects "small sales" of its Tegra systems on the gaming console market in the quarter due to seasonality. Due to declining demand in the console market, Nvidia's total Tegra revenue, which also includes chips sold for infotainment systems and other hardware, dropped by 3% a year on a monthly basis. October to reach $ 407 million.
The lion's share of Nvidia console sales comes from the Nintendo Switch console. With the launch of the Switch in March 2017, it is not surprising that the demand for the console is starting to slow down.
3. Nvidia says GPU demand for Turing and wearable games is strong
While sales of its mid-range desktop gaming GPUs have dropped, Nvidia claims that recently launched high-end GPUs based on its new Turing architecture are doing well.
"The ramp is doing very well," said Huang, noting that Nvidia's high-end RTX 2080 Ti GPU is largely sold at retailers. He also pointed out – fearing that a current shortage of games supporting Turing's real-time ray tracing capabilities could have an impact on short-term sales – that Battlefield V has been recently updated to support ray tracing, and many more games will be doing so soon.
By the way, Huang and Kress have both indicated that Pascal laptop gaming GPU sales, unaffected by the overhead of cryptography and benefiting from the adoption of the Max-Q platform for the creation of & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; Thin and light gaming computers, remained dynamic. GPU notebook sales in China are reported to have increased 50%.
4. Data center sales missed estimates, but nevertheless grew rapidly
Nvidia's Datacenter business revenue amounted to $ 792 million, which is below the consensus of $ 821 million. However, sales grew another 58 percent year-on-year – Nvidia announced strong demand for its flagship graphics processor, the Tesla V100 server, used for deep learning algorithms, as well as other payloads. high performance computing (HPC), as well as its V100 processor. DGX Servers.
Huang also seemed optimistic about the expected performance of the data center segment in the coming quarters. He reiterated his longstanding claim that the end of Moore's Law would continue to fuel an increased demand for GPU acceleration within servers, and presented a large number of recently launched offers – the Nvidia's RAPIDS software platform for GPU-based analysis and machine-learning work, Quadro RTX Server for rendering photorealistic content, and its Turing T4 GPU for inference (model execution) Artificial intelligence compared to actual content) greatly increase the possibilities offered by the data center.
5. Nvidia plans to buy back more shares
In September, Kress had hinted that Nvidia could increase its capital returns, which at the time should total a relatively modest $ 1.25 billion for fiscal year 2019 (ending in January 2019). Nvidia shares are well below the peak reached in early October, it seems that the company now wants to do the same.
Nvidia announced that it has added $ 7 billion to its share buyback authorization, bringing its total available funds to $ 7.94 billion. The company also announced plans to "return an additional $ 3 billion to shareholders by the end of fiscal year 2020," and could begin doing so this quarter.
In addition, Nvidia has increased its quarterly dividend by one cent to $ 0.16 per share. This still represents a modest forward yield of 0.4%.
Eric Jhonsa of TheStreet previously covered Nvidia's results report and telephoned via a live blog.
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