Nvidia Corp. executives on Wednesday forecast another revenue shortfall in the current quarter, after confirming an earlier warning by showing off a sharp reduction in profit.
For the fiscal third, or current, quarter, Nvidia
NVDA,
forecast revenue of $5.78 billion to $6.02 billion, while analysts surveyed by FactSet, on average, have forecast earnings of 85 cents a share on revenue of $6.91 billion.
Nvidia reported second-quarter net income of $656 million, or 26 cents a share, compared with $2.37 billion, or 94 cents a share, in the year-ago period. Adjusted earnings, which exclude stock-based compensation expenses and other items, were 51 cents a share, compared with $1.04 a share in the year-ago period.
Revenue rose to $6.7 billion from $6.51 billion in the year-ago quarter.
Analysts had forecast 50 cents a share on revenue of $6.7 billion. Earlier in the month, Nvidia warned of a $1.4 billion revenue shortfall because of weak gaming sales. That’s on top of the $500 million Nvidia pulled from its second-quarter revenue forecast because of the COVID lockdowns in China and the war in Ukraine.
PC sales have pulled back considerably after a two-year surge, and spending on videogames and gear for them has also come back to earth. At the same time, drops in cryptocurrency prices have made mining less profitable, and Nvidia cards have been used extensively to mine for Ethereum
ETHUSD,
and other crypto.
Data-center sales rose 61% to $3.81 billion, while gaming sales declined 33% to $2.04 billion from a year ago, “primarily attributable to lower sell-in of gaming products, reflecting reduced channel partner sales due to macroeconomic headwinds,” Colette Kress, Nvidia chief financial officer, said in a statement.
Analysts had forecast $2.02 billion in gaming sales and $3.81 billion in data-center sales, after updates following the earlier warning.
Shares declined 3% after hours, following a 0.2% rise in the regular session to close at $172.22.
“We are navigating our supply chain transitions in a challenging macro environment and we will get through this,” Jensen Huang, Nvidia founder and chief executive, said in a statement before highlighting his company’s other businesses beyond gaming.
“Automotive is becoming a tech industry and is on track to be our next billion-dollar business,” Huang said. “Advances in AI are driving our Data Center business while accelerating breakthroughs in fields from drug discovery to climate science to robotics.”
Over the year, Nvidia shares have dropped 42%. In comparison, the PHLX Semiconductor Index
SOX,
is down 28% year to date, the S&P 500 index
SPX,
is down 13%, and the Nasdaq Composite Index
COMP,
off 21%.
