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Nvidia eyes higher sales, talks up Tegra
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SAN FRANCISCO (Reuters) - Graphics chipmaker Nvidia forecast higher sales for the current quarter and said its mobile business would take off next year when tablets and smartphones will use its Tegra chips.
Nvidia's shares rose in after-hours trade...
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NVIDIA President and CEO Jen-Hsun Huang speaks during his keynote address at the GPU Technology Conference in San Jose, California September 21, 2010.
Credit: Reuters/Robert Galbraith
SAN FRANCISCO |
Fri Nov 12, 2010 11:05am EST
SAN FRANCISCO (Reuters) - Graphics chipmaker Nvidia forecast higher sales for the current quarter and said its mobile business would take off next year when tablets and smartphones will use its Tegra chips.
Nvidia's shares rose in after-hours trade after the company said its revenue in the fourth quarter would rise between 3 percent and 5 percent sequentially.
Analyst on average had expected 2.6 percent growth, according to Thomson Reuters I/B/E/S.
Nvidia is moving into the fast-growing mobile business, combining low-powered processors designed by ARM Holdings Plc with its own Tegra brand graphics processors for mobile devices.
"Tegra is what makes or breaks the stock going forward," said Patrick Wang, an analyst at Wedbush Securities. "When you think about what the handset and tablet markets are, those are consumer-centric markets, and with consumers it's either hit or miss."
The company, which specializes in high-performance graphics cards favored by gamers, is diversifying as Advanced Micro Devices and Intel Corp prepare to launch microchips next year that combine traditional core processors with graphics processors.
Mobile devices using Google's Android operating system and Nvidia's Tegra chips will be released early next year, Chief Executive Jen-Hsun Huang told analysts on a conference call.
"Our Tegra business should be quite large. It'll be one of our largest businesses over time," he said, adding that mobile chip sales will help push Nvidia's gross margins above current levels of around 46 percent.
Shares of Santa Clara-based Nvidia rose about 3.7 percent in after-hours trade after closing down 1 percent at $12.61.
The company reported net earnings of $85 million, or 15 cents a share, for its fiscal third quarter ended October 31, compared with a net profit of $108 million, or 19 cents a share, in the year-ago period.
That slightly exceeded analysts' average expectation of 14 cents a share.
AMD and Intel's new combined chips are unlikely to satisfy serious gamers who are willing to splash out hundreds of dollars for top-of-the-line graphics cards, but they may cut into demand for Nvidia's lower-end chips.
The chipmaker said revenue in the third quarter was $844 million, down from $903 million in the year-ago period and in line with estimates of $844 million.
(Reporting by Noel Randewich, additional reporting by Alexei Oreskovic; Editing by Steve Orlofsky, Phil Berlowitz)
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