Nvidia (NVDA, Financial) last announced non-GAAP revenue for the third quarter 2014 of $1.23 billion, an increase of 16% from $1.05 billion last year and jump of 11 percent from $1.10 billion during second quarter of 2014. Revenue also surpassed analysts' average estimate of $1.202 billion. Nvidia expects the fourth quarter of fiscal 2015 revenue to be $1.20 billion, plus or minus 2%.
Nvidia reported non-GAAP earnings per diluted share of $0.39, an increase of 50% from $0.26 last year and a jump of 30% from the previous quarter. Earnings also exceeded analyst’s expectation of 28 cents per share.
New products look impressive
Nvidia’s innovative flagship GPU GeForce GTX excellently served the PC gaming platform. This solid graphics processor based on Maxwell established enhanced power efficiency and new performance standards, launching several unique features for game developers and gamers. Nvidia is focused on developing real-time dynamic worldwide illumination coupled with the framing of other innovative technologies for running games at improved frame rates with extremely low power, noise and heat.
The GTX 970 and the GTX 980 are both desktop versions of these processors and really a game changing product. These processors have topped the review charts and attracted significant crowd of gamers and developers.
In the mobile segment, the SHIELD tablet which is the newest addition of its SHIELD family of devices witnessed healthy quarterly demand. The ultimate gaming tablet illustrates solid performance of Tegra K1 mobile processor and extreme precision control of the SHIELD wireless controller. SHIELD tablet has recorded significant sales expansion in several markets globally and the 32 gigabyte LTE design is recently being appended to the offerings. Going forward, SHIELD tablet is estimated to be upgraded to Google’s (GOOG, Financial) newest OS, Android 5.0 Lollipop. This increased acceptance of the new products offers great earning opportunities for the company and hence an excellent investment option for investors.
Tegra K1 is leveraged in the Google Nexus 9 tablet, Chromebooks from HP and Acer. Tegra technology is also increasingly accepted in the automotive sector.
Gaining traction
Tegra is estimated to support Honda Connect in delivering a touchscreen unique experience with extreme graphics. Thus, Honda is now added to the already robust portfolio of key luxury brands such as Volkswagen (VOW, Financial), Tesla Motors (TSLA, Financial), Lamborghini, BMW (BMW, Financial) and Audi (NSU, Financial). Nvidia’s focus on leveraging its Tegra chips into automobiles is also a part of its strategy to counter the rising competition from other major chipmakers such as Qualcomm (QCOM, Financial).
The Quadro professional solutions offered by Nvidia are gaining impressive popularity among the worldwide enterprise companies.
NVIDIA GRID graphics virtualization for the datacenter platform is gaining significant momentum with several global companies keen on experiencing cloud based GPU accelerated virtual desktops via its tri-grid online display.
Some of Nvidia’s customers include healthcare provider MetroHealth, the global construction group CH2M Hill and aircraft maker Airbus. Other key GRID customers are Halliburton (HAL, Financial) and Villanova University.
China’s key mobile web service company Baidu targets on standardizing Tesla as their widespread platform. IBM launched its new open power based system leveraging Tesla GPU accelerators for significantly enhancing Big Data, Java and technical computing applications.
IBM declared plans to expand their enterprise applications through Tesla GPUs that include their all-comprising IBM DV2 having blue database software.
The sales for Tegra processor increased 51% compared to last year, propelled by the launch of SHIELD tablets, embedded systems, mobile devices and auto infotainment systems.
In the third quarter, Nvidia repurchased 16.8 million shares and paid $46 million in cash dividends to the investors.
Conclusion
Moving ahead into fiscal year ’16, Nvidia is keen on delivering solid shareholder value by returning capital and intends to return nearly $600 million to shareholders by quarterly cash dividends in progress and share repurchases during fiscal year 2016. Hence, Nvidia looks like a good investment from a number of angles, making it a smart investment.
