Updated from 4:54 p.m. EST
jumped as much as 12% on Thursday afternoon, after the company bested Wall Street's forecasts and gave upbeat guidance.
The graphics chipmaker beat the Street's consensus by 4 cents a share in its fiscal fourth quarter. For its current quarter, the company's revenue outlook and implied earnings expectations were also well above the Street's predictions.
Further out, the company expects to see a $50 million to $100 million annual windfall from its recent deal with
to help develop the graphics processor at the heart of the next-generation PlayStation video-game console.
Investors reacted favorably to the news, which followed the bell on Thursday. In recent after-hours trading, the company's shares were up $2.84, or 11.1%, to $28.35.
In its quarter ended Jan. 30, Nvidia earned $48 million, or 27 cents a share, on $566.5 million in sales, up from a year earlier, when the company earned $24.2 million, or 14 cents a share, on $472.1 million in sales.
On average, analysts polled by Thomson First Call were expecting the company to earn 23 cents a share on sales of $566 million. That forecast was raised from earlier this month, when the company
boosted its sales outlook to a range of $560 million to $570 million. Previously, the company had predicted it would post sales of about $516 million in the quarter; it did not give an earnings forecast.
For its full 2005 fiscal year, Nvidia earned $100.4 million, or 57 cents a share, on $2.01 billion in sales. In its previous year, the company posted a profit of $74.4 million, or 43 cents a share, on sales of $1.82 billion.
"2004 was a turning point for Nvidia. We produced a record number of market-leading products and platform-changing initiatives, and set the stage for growth in the coming years," Jen-Hsun Huang, the company's president and CEO, said in a statement.
In its current quarter, Nvidia expects revenue to be flat to up 5% from the fourth quarter, implying a range of $566.5 million to $594.8 million. The company expects its gross margin to be up 50 basis points to 1 percentage point from the 34.2% margin it posted in the fourth quarter. On the downside, the company expects its operating expenses to grow up to 5% from the $136.7 million in costs it recorded in the just-completed period.
The company didn't provide bottom-line guidance. However, assuming that the company's interest income and share count grow at no more than a modest pace in the coming quarter, its guidance implies per share earnings ranging from about 24 cents a share to 32 cents a share.
Both the top-line guidance and the implied bottom line are considerably better than Wall Street's projections. In the current quarter, analysts are expecting Nvidia to earn 19 cents a share on sales of $536.52 million.
The company's forecast is also significantly above last year's results. In the first quarter last year, the company earned $21.35 million, or 12 cents a share, on $471.91 million in sales.
Nvidia officials did not provide their outlook for the company's full fiscal year. However, on a conference call, Huang said the company expected to see $30 million in revenue from the Sony deal this fiscal year. That will rise to $50 million to $100 million a year in the five years following that, he said.
Sony is widely expected to release its next PlayStation console as soon as next year.
Analysts have predicted Nvidia will earn 87 cents a share on $2.26 billion in sales this year.
In the regular session, the company's stock closed down 23 cents to $25.51.