Nvidia Sales Forecast Tops Estimates On Mobile Device Demand
By Ian King - Aug 9, 2012 1:27 PM PT
(BLOOMBERG)- Nvidia Corp. (NVDA) predicted third-quarter sales that exceeded analysts’ estimates, on demand for processors used in tablet devices coming to market in the current quarter.
Revenue for the period ending in October will be $1.15 billion to $1.25 billion, the Santa Clara, California-based company said today in a statement. Analysts had estimated $1.09 billion on average, according to data compiled by Bloomberg.
“Nvidia is bullish because it’s the first time their order book for Tegra is full,” said Patrick Wang, a New York-based analyst for Evercore Partners Inc. (EVR) In graphics chips, “they did gain market share against AMD.”
Nvidia has won orders from Google Inc. (GOOG) and Microsoft Corp. (MSFT) which are pushing into the tablet market with their own devices. The company may have added orders for as many as 10 million units for its Tegra mobile processors, according to Craig Berger, an analyst at FBR Capital Markets & Co.
Second-quarter net income was $119 million, or 19 cents a share, compared with $151.6 million, or 25 cents a share in the same period a year earlier. Analysts had estimated net income of 14 cents a share on sales of $1.01 billion, according to data compiled by Bloomberg.
The shares rose 3.4 percent to $14.71 at the close in New York today. They have gained 6.1 percent this year.
With slowing PC growth and the increasing integration of graphics capabilities into other parts made by Intel and AMD, analysts have predicted Nvidia sales are under threat unless it can compensate by building a mobile phone and tablet processor business.
Shortages from supplier Taiwan Semiconductor Manufacturing Co. (TSM) have held back sales of the company’s most profitable products. Like Qualcomm Inc. (QCOM) and other chipmakers, Nvidia subcontracts its production to foundries in Asia. |
