Nvidia shares fell in the extended session Wednesday after COVID shutdowns in China and the war in Ukraine shaved half a billion dollars off the chip maker’s outlook for the current quarter.
Nvidia Corp. shares fell in the extended session Wednesday after COVID shutdowns in China and the war in Ukraine shaved half a billion dollars off the chip maker’s outlook for the current quarter, while the company reported record results.
No sales to Russia constitutes a $100 million revenue shortfall in Nvidia’s data-center business, Colette Kress, Nvidia’s chief financial officer, told analysts on the conference call. “As we expect ongoing impact, as we prepare for a new architectural transition later in the year, we are projecting gaming revenue to decline sequentially in Q2,” Kress said. “Channel inventory has nearly normalized and we expect it to remain around these levels in Q2.”
“We still believe our end demand remains very strong,” Kress told analysts on the call, adding that gaming revenue is expected to grow on a year-over-year basis. Nvidia reported second-quarter gaming revenue of $3.06 billion in 2021’s second quarter. Meanwhile, Nvidia’s first-quarter data-center sales surged 83% to a record $3.75 billion from $2.05 billion in the year-ago period, while analysts had expected $3.6 billion. On the call, Kress told analysts the company sees “continued momentum going forward,” and that “customers remain supply constrained in their infrastructure needs.”
Nvidia reported first-quarter net income of $1.62 billion, or 64 cents a share, compared with $1.91 billion, or 76 cents a share, in the year-ago period. Adjusted earnings, which exclude stock-based compensation expenses and other items, were $1.36 a share, compared with 91 cents a share in the year-ago period. All figures are adjusted for last year’s 4-for-1 stock split.Analysts had forecast $1.30 a share on revenue of $8.12 billion, based on Nvidia’s forecast of $7.94 billion to $8.26 billion.
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