Chip maker NVIDIA Corp (NASDAQ: NVDA) reported better-than-anticipated fiscal 2023 first-quarter earnings and revenues. However, the company issued a lower-than-anticipated revenue outlook for the second quarter, highlighting distribution chain issues and a slowdown in Russian operations. Following the report of quarterly results, the stock closed at $178.51, an increase of 5.16% or $8.76 from the prior close. The stock has lost more than 43% so far this year as investors continue to shy away from tech-related stocks and purchase safe assets amid surging inflation and global uncertainty.
Santa Clara, California-based company reported first-quarter revenues of $8.29 billion, an increase of 46.50% from $5.66 billion in the similar period last year.
For the quarter ended May 1, 2022, Nvidia posted a net income of $1.62 billion, or $0.64 per share, compared with a net income of $1.91 billion, or $0.76 a share, in the quarter ended May 2, 2021.
A few months ago, Nvidia canceled the acquisition of chip design company Arm. In this regard, the company paid a termination charge of $1.35 billion. This translates to $0.52 per share as per GAAP accounting standards.
Excluding charges, NVIDIA reported a 1Q 2023 non-GAAP net income of $3.443 billion, or $1.36 per share, an increase from $2.313 billion, or $0.91 per share in 1Q22.
Refinitiv analysts had anticipated NVIDIA to report earnings of $1.29 per share on revenues of $8.11 billion.
Commenting on the results, Jensen Huang, founder and CEO of NVIDIA, said, “We delivered record results in Data Center and Gaming against the backdrop of a challenging macro environment.”
Segment-wise,
- Data Center revenues surged 83% y-o-y to $3.75 billion. This division offers semi-conductor chips for enterprises offering cloud computing solutions.
- Gaming business revenues increased 31% to $3.62 billion. Notably, this division sells graphics cards necessary for playing 3D games.
- Professional visualization revenues jumped 67% y-o-y to $622 million.
- Automotive and robotics revenues fell by 10% y-o-y to $138 million.
The company pointed out that revenue growth was led by a rise in the sales of graphics cards used in laptops and chips related to gaming consoles. On a non-GAAP basis, Nvidia’s operating expenses rose 35% y-o-y to $1.60 billion.
Looking ahead, the company anticipated second-quarter revenues of $8.10 billion, which is slightly below analysts’ forecasts of $8.54 billion.
In case there was no Russia-Ukraine conflict and COVID-19 lockdowns in China, as per Nvidia, the 1Q 2022 revenues would be $500 million below the reported figure.
Nvidia has also stated that its Board has authorized another share repurchase program for $15 billion, valid until the end of 2023. During the first quarter, the company had repaid $2.10 billion to investors in the form of share repurchases and dividends.
The quarterly earnings beat and slightly weak Q2 revenue outlook are expected to keep the stock of Nvidia range-bound in the future.
The historical price chart reveals that the stock of Nvidia is declining after facing resistance at 275. The next major support is expected only near 160. The stock is trading below its 50-day moving average, while the stochastics indicator is in the bearish zone. We are expecting the stock to remain in a downtrend in the short term.
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