(Adds detail from conference call)
By Noel Randewich
SAN FRANCISCO May 8 Chipmaker Nvidia's
forecast for current-quarter revenue met analysts' expectations
but failed to inspire investors concerned about a slowing PC
industry, and its stock lost ground.
With the personal computer sector losing steam and the
chipmaker's move into mobile facing relentless competition,
Nvidia is heavily promoting its graphics technology for a wider
range of applications, including cars and data centers.
Nvidia said in a press release on Thursday that for its
fiscal second quarter, which ends in July, it expects revenue of
$1.1 billion, plus or minus 2 percent.
Analysts on average expected revenue of $1.084 billion for
the quarter, according to Thomson Reuters I/B/E/S.
"In this earnings period, coming in inline for guidance has
been viewed as negative because valuations have been moved up.
If you're not beating by a lot then your stock is selling off,"
said Stifel Nicolaus analyst Kevin Cassidy.
On Tuesday, Nvidia released results for the first quarter
that beat expectations after a preliminary draft was
accidentally emailed internally to about 100 people.
Thursday's report from the chipmaker included new details
about its businesses in the first quarter.
Revenue from Nvidia's core PC graphics processor business
rose 14 percent to $898 million in the quarter.
While the overall notebook market shrank in the first
quarter, demand for its advanced graphics chips for high-end
notebooks grew thanks to game enthusiasts, Chief Financial
Officer Collette Kress told analysts on a conference call.
She said that in the current quarter, she expects seasonal
weakness in demand for graphics chips used in low-end laptops.
In the first quarter, revenue from Nvidia's Tegra processor
business rose 35 percent to $139 million due in part to higher
volumes for mobile gadgets and automobiles.
As well as tablets, Nvidia's Tegra chips power entertainment
and navigation systems in cars made by Volkswagen's
Audi, BMW and Tesla. At an event in March,
the company showed off a self-driving Audi powered by a Tegra
Nvidia has also been developing graphics components for
cloud data centers. It said nearly 600 companies are now testing
Nvidia's GRID platform for servers, the chipmaker said.
The company said it expects a second-quarter GAAP gross
margin of 53.7 percent and non-GAAP gross margin of 54 percent.
In the first quarter, Nvidia's GAAP gross margin was 54.8
percent and its non-GAAP gross margin was 55.1 percent.
Nvidia shares fell 3.24 percent in extended trading after
closing up 1.23 percent at $18.50 on Nasdaq.
(Editing by Steve Orlofsky and Eric Walsh)