Nvidia's Profit Misses Estimates

SAN FRANCISCO -- NvidiaNVDA grew its bottom line 33% in the first quarter, but fell short of Wall Street estimates as the company's gross profit margin eroded slightly.

The Santa Clara, Calif., maker of graphics chips earned $176.8 million, or 30 cents a share, vs. $132.3 million, or 22 cents a share at this time last year.

Excluding stock option compensation costs, Nvidia said it earned 36 cents a share -- two cents shy of the average analyst expectation of 38 cents.

Nvidia's gross profit margin decreased to 44.6% in the first quarter, vs. 45.7% in fourth quarter. The chipmaker had forecast that its gross margin would be flat to up slightly sequentially.

Nvidia reported revenue of $1.15 billion in the three months ended April 27, in line with analyst expectations. At this time last year, Nvidia had sales of $844 million.

Shares of Nvidia tumbled 8%, or $1.75, at $20.20 in extended trading Thursday.

Nvidia said sales of its graphics chips designed for PCs continue to outpace the growth of the overall PC market, with the company seeing a 42% jump in unit shipments compared to the year-ago period.

Perhaps less auspiciously, Nvidia's internal inventory increased 17% sequentially to $420 million.

The company did not provide financial guidance for the current quarter, but is scheduled to hold a conference call with analysts later Thursday.