Shares fell more than 18% in pre-market trading Friday.
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Earnings came in at an adjusted $1.84 per share, below analyst expectations of $1.93, on revenue of $3.18 billion, compared to expectations of $3.24 billion. Unadjusted EPS of $1.97 beat analyst expectations of $1.71.
Significantly, guidance was weaker-than-expected, with Nvidia expecting revenue for its 2019 fourth-quarter ending in January to be from $2.65 billion to $2.75 billion, well below Wall Street's estimate of $3.4 billion. Nvidia also raised its quarterly dividend by 7% to 16 cents per share.
"At the end of the day, the quiet secret was that the quarter was not going to be a big beat and raise," said Bill Studebaker, President and Chief Investment Officer of the index provider Robo Global. "They raised their dividend 7%. They've got some confidence in the opportunity [ahead]."
CEO Jensen Huang said in a press release that Nvidia had too much inventory, which hurt quarterly results. "Our near-term results reflect excess channel inventory post the crypto-currency boom, which will be corrected," Huang said.
Huang remained upbeat on the broader picture for Nvidia, as the semiconductor giant has launched several key product architectures. "Our market position and growth opportunities are stronger than ever. During the quarter, we launched new platforms to extend our architecture into new growth markets -- RAPIDS for machine learning, RTX Server for film rendering, and the T4 Cloud GPU for hyperscale and cloud," Huang said.
Nvidia shares rose 2.64% in regular trading hours Thursday in anticipation of the earnings print. The stock is up 4.59% this year, and could certainly start regular trading hours Friday much lower, bringing Nvidia's year-to-date gain far below the tech-heavy Nasdaq's.