Graphics chip maker Nvidia said that its earnings for the first fiscal quarter beat expectations, but revenues were slightly short.
Nvidia is amid a pivot from smartphones and tablets to automotive and gaming chips. Shares of Nvidia rose earlier this week after the company said Tuesday that it would end its Icera cellular modem products and look into possibly selling the unit. In doing so, it followed baseband modem maker Broadcom in exiting that business. Qualcomm, MediaTek, Spreadtrum, and new contender Intel are heavily focused on that market. Icera has nearly 500 employees, and it was designing 4G LTE modems.
Analysts expected Nvidia’s first fiscal quarter revenue to be $1.16 billion, with net income per share of 26 cents. Nvidia reported net income of 33 cents a share (down 2 percent from a year ago) on a non-GAAP basis, with revenue at $1.15 billion (up 4 percent). GeForce graphics processing units (GPUs) for gaming desktops and notebooks drove sales — these were up 14 percent thanks to a surge in PC gaming and the launch of Nvidia’s high-end Maxwell-based GPUs.
Nvidia’s Tesla GPUs for cloud service providers also sold well. Tegra processor revenues were up 4 percent from a year ago, driven by automotive infotainment systems and Shield devices. Nvidia said overall GPU revenue was down because of a seasonal decrease in consumer PC sales.
Nvidia is also nearing the launch of its Nvidia Shield set-top box for cloud-based Android gaming in the living room. It faces a lot of contenders for its Android TV box, but the company hopes that its high-end Tegra chips will set apart the machine.
Nvidia’s revenue is spread across visual computing hardware in gaming graphics chips, cars, enterprise, high-performance computing, and cloud graphics. It is making a heavy investment into research and products related to deep learning, or using artificial intelligence such as neural networks to solve tough problems such as vision for self-driving cars. Nvidia said it is talking to lots of car makers about these applications, and it has created prototype computers for car dashboards and car control systems.
In the previous fourth fiscal quarter, Nvidia reported net income of 35 cents a share, up 40 percent from 25 cents a share. Revenue was $1.25 billion, up 9 percent from $1.14 billion a year earlier.
Nvidia guided second fiscal quarter revenues to about $1 billion, compared to estimates of $1.18 billion.
