Nvidia Corp. (NASDAQ: NVDA) reported second quarter 2016 results after markets closed on Thursday. For the quarter the chipmaker reported adjusted diluted earnings per share of $0.34 and $1.15 billion in revenues. In the same period a year ago, Nvidia reported EPS of $0.30 on revenue of $1.03 billion. Second-quarter results compare to the Thomson Reuters consensus estimates for EPS of $0.10 and $1.01 billion in revenue.
On Wednesday the company voluntarily recalled some of the Shield 8-inch tablets it has sold since the product’s launch in July of 2014 to replace a battery that may overheat. Reuters reported that the recall may cost Nvidia $1 million according to one estimate.
On a GAAP basis EPS per diluted share totaled $0.05 which included a charge of $0.19 per share to wind down a modem business and $0.02 per share related to the recall of its Shield tablets.
CEO Jen-Hsun Huang said:
Our strong performance in a challenging environment reflects NVIDIA’s success in creating specialized visual computing platforms targeted at important growth markets. … Our gaming platforms continue to be fueled by growth in multiple vectors — new technologies like 4K and VR, blockbuster games with amazing production values, and increasing worldwide fan engagement in e-sports. … Visual computing continues to grow in importance, making our growth opportunities more exciting than ever.
For the third quarter of the fiscal year Nvidia expects revenues of $1.18 billion plus or minus 2%. Gross margins are forecast at 56.5% on a non-GAAP basis, plus or minus 50 basis points. The GAAP outlook excludes additional restructuring charges which the company expects to total $15 to $25 million in the second half of the fiscal year.
The stock traded about 9.3% higher in the after-hours session Thursday at $22.35 in a 52-week range of $16.77 to $23.61.
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