Nvidia forecasts sales boost after decent results

Knocker-up of drawings of graphics chips, Nvidia reckons it will see more sales of chips it designed this coming quarter, giving its stock a boost following a miserable few months.

The outfit yesterday reported revenue of $1.02 billion for the second quarter of fiscal 2012 (ending July 31, 2011), up 5.7 per cent from Q1, and up 25.3 percent from $811.2 million in the comparable period last year.

It said it made $151.6 million profit in the quarter, up from $135.2 million, in Q1 and well up from the net loss of $141 million the outfit posted in Q2 last year.

GAAP gross margin was 51.7 percent, up from 50.4 per cent in the previous quarter.

Jen-Hsun Huang Nvidia's president and CEO described growth in the quarter as solid. "Consumer demand for notebooks powered by our GeForce GPU, with its unique Optimus technology, resulted in record revenue for these products," he claimed.

"The future of computing is mobile and visual. With Tegra's momentum and our growing GPU businesses, we are ideally positioned to lead the industry forward," he spun.

The firm reckons it will outperform analysys' expectations for the coming quarter predicting sales revenue will rise by between four and six per cent from the second quarter - we'll call that five - indicating sales of as much as $1.08 billion.

Huang told Bloomberg that Nvidia expects both desktop and notebook graphics card sales to hold up despite sales of computers slowing in the mature markets such as the US.Huang reckons markets outside the U.S. use more graphics chips in their PCs.

Shares in the outfit were up by as much as $2.82 to $16.23 following the announcement, clawing back some of the losses that have sen their value fall by as much as 13 per cent this year.

Nvidia Chief Executive Officer Jen-Hsun Huang is aiming to lessen Nvidia’s dependence on chips used in PCs with a push into processors for mobile phones and tablet computers. That business, based on Tegra, has also won him orders from LG Electronics Inc. and Motorola Mobility Holdings Inc.

“We have an opportunity to gain share in both notebook and desktop, but probably the most important thing is that the graphics processor market is still robust,” Huang said in a telephone interview. Markets outside the U.S. have a much higher rate of graphics chip use in PCs, he said.

Net income in the second quarter was $151.6 million, or 25 cents a share, compared with a loss of $141 million, or 25 cents, a year earlier, the company said in the statement. Sales in the period that ended July 31 rose 25 percent to $1.02 billion. Analysts on average had predicted profit of $156.1 million, or 25 cents a share, on sales of $1 billion.