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Nvidia shares were down more than 40% this year as of Tuesday’s close.
Justin Sullivan/Getty Images
Nvidia
provided an earnings forecast for the October quarter that was below expectations, citing a difficult macroeconomic environment and a rapid decline in demand. Its shares fell in after-market trading.
The semiconductor company reported adjusted earnings per share of 51 cents for the July quarter, compared with the consensus estimate of 50 cents among analysts tracked by
FactSet
.
Revenues came in at $6.7 billion, matching both the negative prior announcement
Nvidia
(ticker:
NVDA
) were issued earlier and recently reduced analyst expectations.
The big news was the outlook. For the current quarter, Nvidia said revenue would be in a midpoint range of $5.9 billion, well below the consensus call of $6.9 billion.
“We are navigating the transition of our supply chain in a challenging macro environment, and we will rise to it,” said Jensen Huang, Nvidia’s founder and CEO, in the release.
Shares of Nvidia fell 4.7% after the report.
Earlier this month, Nvidia announced in advance disappointing second fiscal quarter results. At the time, he blamed weaker-than-expected sales in the gaming segment.
On a conference call to discuss the results, management said Nvidia had seen a “sudden slowdown” in demand. Both prices and the number of units sold deteriorated in the quarter, an executive said. Nvidia “couldn’t quantify” the extent to which reduced cryptocurrency mining led to the decline in gaming card sales.
In a phone interview after the call, Chief Financial Officer Colette Kress said Nvidia products using their new chip architecture will be “coming soon.” When asked if the pricing structure for the current generation of Ampere cards was sustainable for the next, she said they would look at market conditions at launch to determine pricing.
Regarding the potential for stronger competition in this upcoming cycle of
Advanced Micro Devices
(
AMD
), Kress said their cards have a stronger brand among gamers and dominate the chart for the most used cards in game services. She also expressed confidence that their partnerships with game publishers and Nvidia’s more advanced software features will beat the competition.
some analysts worry that demand for Nvidia graphics cards may remain weak due to the company’s exposure to crypto mining, increased prices for its high-end cards and the negative effects of a deteriorating global economy.
Shares of Nvidia were down 41% this year at Wednesday’s close, compared with a 27% drop in the iShares Semiconductor ETF ( SOXX ), which tracks the performance of the ICE Semiconductor Index.
Write to Tae Kim at tae.kim@barrons.com