SANTA CLARA (dpa-AFX) - Nvidia Corp. (NVDA) said Thursday its third-quarter earnings grew robustly from last year, on higher gross margins and a double-digit revenue growth driven by demand for its graphic chips. The company's earnings and sales for the quarter also topped Wall Street estimates. Nvidia has also forecast a flat topline growth for the fourth-quarter, plus or minus 2 percent, compared to the third quarter. Following the results, Nvidia shares gained over 4 percent in extended trade on the Nasdaq.
Clara, California-based Nvidia reported third-quarter net income of $178 million or $0.29 per share, an increase from $85 million or $0.15 per share last year.
Excluding items, adjusted net income for the quarter was $217 million or $0.35 per share, compared to $117.4 million $0.20 in the prior year.
On average, 30 analysts polled by Thomson Reuters expected earnings of $0.26 per share for the quarter. Analysts' estimates typically exclude special items.
Gross margin for the quarter improved to 52.2 percent from 46.5 percent a year earlier, while adjusted gross margin increased to 52.5 percent from 46.8 percent.
Revenue for the quarter grew 26.3 percent to $1.07 billion from $844 million last year. Thirty-two Wall Street analysts expected revenues of $1.06 billion for the quarter.
Nvidia CEO Jen-Hsun Huang said, 'Our GPU business accelerated in the third quarter, driven by strong demand from gamers and the professional market. And our mobile business benefited from new devices coming onto the market. With Tegra 3 phone wins well ahead of Tegra 2's pace, we're expecting strong growth in the year ahead.'
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. Nvidia, which launched Tegra 3, the world's first quad-core processor for super phones and tablets, is betting high on the chip, foreseeing strong demand from gadget makers.
During the quarter, Nvidia spent $256 million in research and development, up from $204 million last year.
Looking ahead to the fourth quarter, the company expects revenues to be relatively flat, plus or minus two percent, from the third quarter. GAAP and non-GAAP gross margins are expected to be flat to up 0.5 percentage points, compared to the third quarter.
NVDA closed Tuesday's regular trade at $14.47, up $0.15 or 1.05%, on a volume of 24.5 million shares on the Nasdaq. In after hours, the stock gained $0.58 or 4.01%.
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