Nvidia Third Quarter Earnings Beat Expectations

Shares of Nvidia were up by 0.6% on Thursday as investors waited for the GPU suppliers to report its third quarter earnings. With competitors AMD and Intel both reporting good numbers earlier it was expected that Nvidia would also have a strong showing in the third quarter.

The company didn’t disappoint either, reporting earnings of $1.78 a share on sales of $3.01 billion versus expectations of $1.58 a share earnings on $2.92 billion in revenues.

The stock rose 1.8% immediately following the results, but gains were muted after Nvidia management lowered fourth quarter guidance below Wall Street expectations during their post-earnings conference call. By the end of the post-earnings conference call shares had given back all the gains and were trading 0.3% lower.

On a more positive note, Nvidia does expect its fourth quarter revenues to rise versus year-ago results, which would snap a four quarter string of revenue declines. That string of declines began in the fourth quarter last year as the declining cryptocurrency markets caused demand for Nvidia’s high-end GPUs, which are used for cryptocurrency mining, to dry up.

Not only did sales drop, but the following quarters saw slack demand due to a glut of used hardware on the market. While revenue did decline in the third quarter, it was far less than in previous quarters, and also less than expected. The $3.01 billion in revenues this third quarter was just shy of the $3.18 billion revenues from the third quarter of 2018.

Shares of Nvidia are up 57.2% since the start of 2019, and topped the 52-week high in the after-hours rally.