NVIDIA Corporation (NASDAQ: NVDA) stock fell over 1.6% on 15th November, 2019 (As of 11:26 am GMT-5; Source: google finance) post the third quarter of FY 20 update. Nvidia has reported a 27% decline in net income to $899 million.
NVDA in the third quarter of FY 20 has reported the adjusted earnings per share of $1.78, beating the analysts’ estimates for the adjusted earnings per share of $1.57, according to the Zacks Consensus Estimate. The company had reported 5 percent fall in the adjusted revenue to $3.01 billion in the third quarter of FY 20, beating the analysts’ estimates for revenue by 3.87%. The company in the last year enjoyed strong sales in its third quarter, on the back of both by customers in China, who placed orders ahead of looming tariffs on some U.S. goods, and by demand for chips used for cryptocurrency mining. Nvidia’s gaming division, which accounts for more than half of its revenue, got a boost from sales of Nintendo Co.’s new Switch Lite gaming console, which uses the company’s chips. Nintendo had sold 1.95 million of the devices in the third quarter, which helped Nvidia’s gaming segment to post a 26% revenue increase compared with the second quarter.
For the fourth quarter of 2020, the company expects the revenue to be $2.95 billion, plus or minus 2%. The company expects to have strong sequential revenue growth in Data Center, which will be offset by a seasonal decline in GeForce notebook GPUs and SoC modules for gaming platforms. Non-GAAP gross margins are expected to be 64.5 percent, plus or minus 50 basis points
NVIDIA has declared the quarterly cash dividend of $0.16 per share, payable on December 20, 2019, to all shareholders of record on November 29, 2019. Meanwhile, Nvidia said the closing of its about $7 billion deal to buy networking company Mellanox Technologies Ltd., which is a key aspect of a strategy to offer a wider set of hardware tools to customers is expected to be delayed. The company had reached the deal, in March, has been approved by U.S. regulators. Talks are still ongoing with authorities in China and Europe, which could push out the closing date into early next year. Once the deal is closed, Nvidia said it would resume share repurchases that it put on hold as it built up cash to pay for the acquisition.