FILE PHOTO: The logo of Nvidia Corporation is seen during the annual Computex computer exhibition in Taipei, Taiwan May 30, 2017. REUTERS/Tyrone Siu/File Photo
(Reuters) – Nvidia Corp forecast second-quarter revenue above Wall Street estimates, saying that its graphics chip business returned to growth, sending the chipmaker’s shares up about 6% in extended trading.
While Nvidia has been pushing into newer growth areas such as data centers, artificial intelligence and self-driving cars, the company’s key business still remains selling chips that enhance video game graphics.
Revenue from its gaming business rose 11 percent from the fourth quarter to $1.05 billion and beat research firm Factset’s estimates of $933.5 million.
“I think China has stabilized. The gaming market in China is really vibrant and it continues to be vibrant,” Chief Executive Jensen Huang said on a post-earnings conference call.
The company forecast revenue of $2.55 billion, plus or minus 2%, for the current quarter, largely above analysts’ expectations of $2.53 billion, according to IBES data from Refinitiv.
Summit Insights analyst Kinngai Chan said the current quarter outlook was “better than feared”, with the mid-end gaming segment continuing to be the growth driver.
Nvidia’s net income fell to $394 million, or 64 cents per share, in the first quarter ended April 28 from $1.24 billion, or $1.98 per share, a year earlier.
Excluding items, Nvidia earned 88 cents per share, above 81 cents per share estimated by analysts.
Total revenue fell to $2.22 billion, but was still above analysts’ estimates of $2.20 billion.
Reporting by Sayanti Chakraborty in Bengaluru; Editing by Anil D’Silva