Nvidia tops analysts’ estimates for earnings and revenue in the first quarter

Nvidia tops analysts’ estimates for earnings and revenue in the first quarter
Written by:
Wajeeh Khan
22nd May, 11:57
  • Nvidia posts £2.53 billion in revenue and £1.48 of adjusted earnings per share in the first quarter.
  • The technology company closed its Mellanox acquisition in April that may help its results in Q2.
  • The GPU designer records an unprecedented 80% growth to £940 million in data centre revenue.

Nvidia (NASDAQ: NVDA) released its quarterly financial results on Wednesday that topped the analysts’ estimates for earnings and revenue in the first quarter. Despite the upbeat performance, shares of the company were reported about 1% down in extended trading on Wednesday. The regular session closed with a 2% intraday loss for Nvidia in the stock market on Wednesday. Nvidia earnings report came only a week after its stock hit an all-time high after BMO upgrade.

Nvidia’s CFO Colette Kress said in a letter on Wednesday:

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“COVID-19 created challenges in supply and demand. Early in the quarter, our partners’ supply chains were disrupted. Shelter-in-place resulted in closure of retail outlets and China iCafes, affecting sales of our gaming products. However, work from home, learn at home, and gaming drove a surge in e-tail demand.”

Nvidia closed the Mellanox acquisition in April that is likely to help its results in Q2.

Nvidia’s Q1 financial results versus analysts’ estimates

According to Refinitiv, analysts had anticipated the company to print £2.46 billion in revenue in the first quarter. Their estimate for earnings per share (EPS) was capped at £1.39. In its report on Wednesday, Nvidia topped both estimates posting a higher £2.53 billion in revenue in Q1 and £1.48 of adjusted earnings per share.

In the same quarter last year, Nvidia had recorded £1.82 billion in revenue and 72.2 pence of adjusted earnings per share. In the second quarter, Nvidia said that it is anticipating around £2.99 billion in revenue and about 58.6% of gross margins.

Nvidia records an unprecedented 80% growth in data centre revenue

In the quarter that ended on 26th April, Nvidia’s revenue from gaming segment climbed to £1.56 billion that marks a 25% increase versus the comparable quarter last year. Data centre revenue posted a record 80% growth on an annualized basis to £940 million. It was the first time in history for Nvidia’s data centre revenue to top £820 million milestone.

Despite the Coronavirus driven challenges, Nvidia maintained its dividend payments. On Thursday, it also said that it is assessing the timing of the company’s share buyback program.  

Nvidia is currently about 50% year to date in the stock market as compared to an over 8% decline in the benchmark S&P 500 index. Its performance in 2019 was also reported largely upbeat with an annual gain of more than 70%.

Nvidia is valued at £177.16 billion and has a price to earnings ratio of 77.58.

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