SANTA CLARA (dpa-AFX) - Graphics chip maker Nvidia Corp. (NVDA) said Thursday after the markets closed that it swung to a second quarter profit, helped by higher revenue and sharply improved gross margin. The company's earnings per share also came in above analysts' expectations as did its quarterly revenue. The company also issued an upbeat revenue outlook for the third quarter, sending its share up by more than 17% in after hours trading.
The Santa Clara, California-based company reported GAAP net income for the second quarter of $151.6 million or $0.25 per share, compared to a GAAP net loss of $141.0 million or $0.25 per share for the year-ago quarter.
Excluding items, non-GAAP net income for the second quarter was $193.5 million or $0.32 per share, compared to $47.6 million $0.08 per share in the prior year quarter.
On average, 30 analysts polled by Thomson Reuters expected the company to earn $0.25 per share for the second quarter. Analysts' estimates typically exclude special items.
GAAP gross margin for the quarter improved to 51.7% from 16.6% a year earlier, while non-GAAP gross margin increased to 51.9% from 39.2% last year.
Revenue for the second quarter rose 26% to $1.02 billion from $811.21 million in the same quarter last year. Thirty-one analysts had a consensus revenue estimate of $1.01 billion for the second quarter.
'We grew solidly this quarter,' said Jen-Hsun Huang, Nvidia president and chief executive officer. 'Consumer demand for notebooks powered by our GeForce GPU, with its unique Optimus technology, resulted in record revenue for these products.
Nvidia completed its $367 million all-cash acquisition of Icera in June. Nvidia currently offers the two main processors used in smartphones with the addition of Icera. They are the applications processor, in the form of the NVIDIATegra super chip, and the baseband processor, based on Icera technology.
Looking forward, the company forecast third quarter revenue to be up 4% to 6% sequentially, implying third quarter revenue of $1.06 billion to $1.08 billion. Analysts currently expect the company to post revenue of $1.05 billion for the third quarter.
Third quarter GAAP and non-GAAP gross margins are expected to be flat.
Nvidia shares, which have traded in a range of $8.65 to $26.17 over the past year, closed Thursday's regular trading session at $13.41, up $1.07 or 8.97%. The stock is currently gaining $2.37 or 17.67% in after hours trading.
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