NVIDIA reported profit of $136.5 million, or 24 cents a share, down 7.1% sequentially from $146.9 million, or 25 cents a share. Earnings per share were 29 cents, excluding items, down from 32 cents. Analysts polled by Thomson Reuters expected earnings of 16 cents a share.
Revenue fell 3.6% to $1.1 billion, which beat the NVIDIA's expectation of $1.03 billion to $1.07 billion. Gross margin widened to 54.8% from 54.1%, while total operating expenses rose slightly to $452.8 million.
NVIDIA reported the results early because of an email mistake that accidentally sent a preliminary draft of the results to 100 people on an internal distribution list at the company. NVIDIA said it would release the full results and guidance on Thursday, the originally anticipated release day.
The stock just after the market opened but was down 1.88% to $18.28 at 11:30 a.m.
Separately, TheStreet Ratings team rates NVIDIA CORP as a "buy" with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate NVIDIA CORP (NVDA) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, solid stock price performance and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- NVDA's revenue growth has slightly outpaced the industry average of 3.3%. Since the same quarter one year prior, revenues slightly increased by 3.4%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- The current debt-to-equity ratio, 0.31, is low and is below the industry average, implying that there has been successful management of debt levels. Along with this, the company maintains a quick ratio of 5.39, which clearly demonstrates the ability to cover short-term cash needs.
- Compared to its closing price of one year ago, NVDA's share price has jumped by 36.04%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, NVDA should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- The gross profit margin for NVIDIA CORP is rather high; currently it is at 58.36%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 12.83% trails the industry average.
- You can view the full analysis from the report here: NVDA Ratings Report