NVIDIA shares soar on better-than-expected outlook for FY2020

Posted on Thursday, February 14 2019 @ 22:49 CET by Thomas De Maesschalck
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NVIDIA's fiscal Q4 2019 results are out, the company recorded revenue of $2.21 billion, down 24 percent year-over-year, and non-GAAP net income of $496 million, down 54 percent year-over-year. Revenue missed analyst estimates by $30 million while earnings per share of $0.80 beat by $0.17.

The company's shares are up 7.44 percent in after-hours trading to $166.03, which is still a far cry from the all-time high of $292.76 from Fall 2018. Investors are bidding up the stock on the "flat to slighty down" revenue guidance for fiscal 2020, which is better than the 5 percent drop that was guided by analysts.
NVIDIA (NASDAQ: NVDA) today reported revenue for the fourth quarter ended Jan. 27, 2019, of $2.21 billion, down 24 percent from $2.91 billion a year earlier, and down 31 percent from $3.18 billion in the previous quarter.

GAAP earnings per diluted share for the quarter were $0.92, down 48 percent from $1.78 a year ago and down 53 percent from $1.97 in the previous quarter. Non-GAAP earnings per diluted share were $0.80, down 53 percent from $1.72 a year earlier and down 57 percent from $1.84 in the previous quarter.

For fiscal 2019, revenue was $11.72 billion, up 21 percent from $9.71 billion a year earlier. GAAP earnings per diluted share were $6.63, up 38 percent from $4.82 a year earlier. Non-GAAP earnings per diluted share were $6.64, up 35 percent from $4.92 a year earlier.

“This was a turbulent close to what had been a great year,” said Jensen Huang, founder and CEO of NVIDIA. “The combination of post-crypto excess channel inventory and recent deteriorating end-market conditions drove a disappointing quarter.

“Despite this setback, NVIDIA’s fundamental position and the markets we serve are strong. The accelerated computing platform we pioneered is central to some of world’s most important and fastest growing industries – from artificial intelligence to autonomous vehicles to robotics. We fully expect to return to sustained growth,” he said.

Capital Return
In fiscal 2019, NVIDIA returned $1.95 billion to shareholders through a combination of $1.58 billion in share repurchases and $371 million in quarterly cash dividends.

Of the $3.00 billion NVIDIA intends to return to shareholders by the end of fiscal 2020, $700 million in share repurchases were completed in the fourth quarter of fiscal 2019. The company intends to return the remaining $2.30 billion by the end of fiscal 2020, through a combination of share repurchases and cash dividends.

NVIDIA will pay its next quarterly cash dividend of $0.16 per share on March 22, 2019, to all shareholders of record on March 1, 2019.

NVIDIA’s outlook for the first quarter of fiscal 2020 is as follows:

Revenue is expected to be $2.20 billion, plus or minus 2 percent.

GAAP and non-GAAP gross margins are expected to be 58.8 percent and 59.0 percent, respectively, plus or minus 50 basis points.

GAAP and non-GAAP operating expenses are expected to be approximately $930 million and $755 million, respectively.

GAAP and non-GAAP other income and expense are both expected to be income of approximately $20 million.

GAAP and non-GAAP tax rates are both expected to be 10 percent, plus or minus 1 percent, excluding any discrete items. GAAP discrete items include excess tax benefits or deficiencies related to stock-based compensation, which are expected to generate variability on a quarter by quarter basis.

For fiscal 2020, revenue is expected to be flat to down slightly.


About the Author

Thomas De Maesschalck

Thomas has been messing with computer since early childhood and firmly believes the Internet is the best thing since sliced bread. Enjoys playing with new tech, is fascinated by science, and passionate about financial markets. When not behind a computer, he can be found with running shoes on or lifting heavy weights in the weight room.



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