Start Finance Nvidia profit cut in half – but investors satisfied

Nvidia profit cut in half – but investors satisfied

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mohamed_hassan / Pixabay

The Christmas quarter has gone for the graphics card specialist Nvidia as already announced mies.

Profit fell 54 percent year-over-year to $ 567 million. Sales plummeted by nearly a quarter to $ 2.2 billion, Nvidia said after the US close.

At the end of January, the group had cut its revenue forecast by $ 500 million to this level. The stock subsequently lost around one-fifth of its value.

Now the paper increased by over five percent in after-hours trading. Among other things, adjusted earnings per share were slightly better than expected by the market.

Nvidia had become another high-tech group in the final quarter of 2018, which was hit hard by the slowdown in the Chinese economy. The weaker economy in China had there affected the demand of consumers for Nvidia graphics cards, it was already called to reduce the forecast.

At Nvidia, however, sales of the new, traditionally expensive top models with significantly improved performance were also lower than expected worldwide, it was said. Gamers may have been waiting for prices to drop – and more RTX technology for the new cards, which will provide better image quality, will be supported by more games. Quarterly gaming revenue fell 45 percent year-on-year to $ 945 million.

CEO Jensen Huang was confident that demand would pick up again this year with the release of more games supporting RTX technology. Nvidia had also presented in January a first cheaper graphics card with the technology.

In the datacenter business, where the company’s chips are used, for example, for learning-machine and artificial-intelligence applications, revenue increased 12 percent to $ 679 million. With computers for driver assistance systems and future autonomous cars, Nvidia made $ 163 million in revenue – 23 percent more than a year earlier.

The negative effects of the end of the Bitcoin boom have meanwhile developed to the expected extent, Nvidia had already explained in lowering the forecast. Graphics cards from the company have been widely used for the production of various crypto currencies. As prices of Bitcoin & Co crashed, so did the global demand for computer technology that can be used to mine the virtual coins.