Nvidia Slides By in Q3 Despite Record Results

Nvidia Corp. (NASDAQ: NVDA) reported its fiscal third-quarter financial results after the markets closed on Wednesday. The chipmaker said that it had $2.91 in earnings per share (EPS) and $4.73 billion in revenue, versus consensus estimates that called for $2.57 in EPS and $4.41 billion in revenue. The same period from last year had $1.78 in EPS and $3.01 billion in revenue.

Nvidia’s management noted that the company is firing on all cylinders, achieving record revenues in Gaming, Data Center and overall.

During the quarter, total revenues increased 57% year over year, and 22% quarter over quarter. This consisted of record revenues from both the Gaming and Data Center business segments.

The company posted record Gaming revenues of $2.7 billion, an increase of 37% year over year. Data Center revenues hit an all-time high too at $1.90 billion, an increase of 162%.

Separately, Professional Visualization revenues increased 16% to $236 million, and Automotive revenues increased 13% to $125 million.

Perhaps one of the biggest highlights from this quarter was that Nvidia announced it would be acquiring Arm Limited from SoftBank in a transaction valued at $40 billion. The transaction will combine Nvidia’s leading AI computing platform with Arm’s vast ecosystem to create the premier computing company for the age of AI. The deal is expected to close in the first quarter of the 2022 calendar year.

Nvidia’s cash, cash equivalents and marketable securities totaled $10.14 billion at the end of the quarter, versus $10.90 billion at the end of the previous fiscal year. Nvidia paid $99 million in quarterly cash dividends in the third quarter. It will pay its next quarterly cash dividend of $0.16 per share on December 29, to all shareholders of record on December 4.

Looking ahead to the fiscal fourth quarter, the company expects to see revenues of $4.80 billion, plus or minus 2%. Consensus estimates are calling for $2.54 in EPS and $4.42 billion in revenue for the coming quarter.

Nvidia stock closed Wednesday at $537.15, in a 52-week range of $180.68 to $589.07. The consensus price target is $574.31. Following the announcement, the stock was relatively flat at $237.00 in the after-hours session.