Nvidia posted strong results for its third quarter and said it will consequently both lift its dividend and return more to shareholders. CEO Jensen Huang said AI drove record revenue for the company’s data centre operations, although other divisions also came up with record highs. Huang noted the company’s introduction of Turing GPUs for computer graphics and AI and of new platforms in general, extending its architecture into new growth markets. “Our market position and growth opportunities are stronger than ever," the CEO said.
The company reported revenues up 21 percent from the year before to USD 3.18 billion, with record revenue from Datacentre, Professional Visualization and Automotive platforms. The company’s net profit leaped 47 percent to USD 1.230 billion from 1.101 billion, with earnings per diluted share jumping 48 percent to USD 1.97. The gross margin improved year-on-year to 60.4 percent from 59.5 percent. Operating expenses also went a bit higher, to USD 863 million from 674 million.
The company upped its quarterly dividend by 7 percent to USD 0.16 per share and lifted its share buyback programme in November by an additional USD 7 billion, for a total of USD 7.94 billion through the end of December 2022. It will now return an additional USD 3 billion, before the end of fiscal 2020. Nvidia has returned USD 1.13 billion in the first nine-months of this year.
For the fourth quarter, the company is guiding for revenues of USD 2.70 billion, plus or minus 2 percent, a gross margin of 62.3 percent and operating expenses at USD 915 million.
During a press conference, the CEO als explained that the cryptocurrency 'bubble' took the company by surprise and caused an excess of graphics processing unit (GPU) inventory, VentureBeat reported, noting that the high sale of GPUs for Bitcoin slowed down and miners stopped buying GPUs. Nvidia said it will take a couple of quarters to clear that inventory and get back to normal sales. All these events caused the company's gaming operations, which included crypto-related sales, to come under expectations.
