NVIDIA Corporation (NASDAQ: NVDA) stock rose over 2% on Feb 15th, 2019 (as of 10:14 am GMT-5; Source: Google finance) after the company posted better than expected results for the fourth quarter of FY 19. Its outlook for the 2020 fiscal first quarter missed analyst expectations only slightly and its data center business, where it competes against Intel Corp, did not fall as far as analysts had feared. Nvidia has grown at a rapid pace in the past few years, but a slowdown in China and a fading cyrptocurrency craze have started to weigh on its sales
Nvidia has entered into newer growth areas such as data centers and self-driving cars as it looks beyond its bread-and-butter business of selling chips that enhance video game graphics. Analysts had been concerned about Nvidia’s fast-growing data business because Intel, the biggest supplier of chips used in data centers, last month gave a lower-than-expected sales forecast on slower buying from cloud computing customers, especially in China.
NVDA in the fourth quarter of FY 19 has reported the adjusted earnings per share of 80 cents, beating the analysts’ estimates for the adjusted earnings per share of 75 cents, according to Refinitiv. The company had reported 24 percent fall in the adjusted revenue to $2.21 billion in the fourth quarter of FY 19, beating the analysts’ estimates for revenue of $2.11 billion. Nvidia has reported that its gaming business segment finished the period with about $954 billion in sales, missing the $1.21 billion that the Refinitiv poll was forecasting. The company added that its Data Center business segment reeled in $679 million in revenue, below the $839 million that the Refinitiv guidance called for. The company’s Professional Visualization segment revenue was $293 million, below the $314 million projection. NVDA’s Automotive segment posted revenue of $163 million, below the $181 million guidance, while revenue from original equipment manufacturers and intellectual property amounted to $116 million, below the $124 million estimate.
The chip designer forecast first-quarter revenue of US$2.20 billion, plus or minus 2 percent, for the quarter. Analysts on average were expecting revenue of US$2.28 billion, according to IBES data from Refinitiv.
In FY 19, NVIDIA returned $1.95 billion to shareholders through a combination of $1.58 billion in share repurchases and $371 million in quarterly cash dividends. Of the $3.00 billion NVIDIA intends to return to shareholders by the end of fiscal 2020, $700 million in share repurchases were completed in the fourth quarter of fiscal 2019. The company intends to return the remaining $2.30 billion by the end of fiscal 2020, through a combination of share repurchases and cash dividends. NVIDIA will pay its next quarterly cash dividend of $0.16 per share on March 22, 2019, to all shareholders of record on March 1, 2019.