uploads///Nvidia

What Drove Nvidia’s Revenue Growth in Fiscal 4Q18?

By

Feb. 15 2018, Published 8:21 a.m. ET

Nvidia beat both earnings and revenue estimates

Chipmaker Nvidia (NVDA) reported its fiscal 4Q18[1. fiscal 4Q18 ended December 31, 2017] earnings on February 8, 2018. The company handily beat both earnings and revenue estimates.

Nvidia’s revenues grew 34.0% in fiscal 4Q18 from fiscal 4Q17 to ~$2.9 billion, which was higher than Wall Street estimates of ~$2.7 billion. The company’s revenues for fiscal 2018 stood at ~$9.7 billion.

Nvidia generated EPS (earnings per share) of $1.78 in fiscal 4Q18, while analysts expected $1.17 per share. However, its earnings beat was partly due to the $133.0 million windfall in fiscal 4Q18 due to the recently passed Tax Cuts and Jobs Act.

Article continues below advertisement

Gaming and data center saw robust growth

Gaming, which is Nvidia’s (NVDA) biggest segment, generated revenues of ~$1.7 billion against analysts’ estimates of ~$1.5 billion. The company noted that the popularity of the Nintendo Switch was a contributor to the uptick in its Gaming segment’s revenues.

Nvidia’s revenues from its second-largest segment, the Data Center business, grew to $606.0 million in fiscal 4Q18 and more than doubled year-over-year.

Nvidia stock fell 4.9% on February 8, as 97.0% of the stocks in the S&P 500 (SPX-INDEX) shares declined on the day. However, after its earnings were announced after the market closed, NVDA stock ticked up 10.2% in after-hours trading. The company’s stock has returned nearly 85.0% in the last 12 months.

Advertisement

More From Market Realist